California Faces Impact from New Medicaid Work Requirements

A new job requirement for Medicaid, which has been approved by a Republican-led Congress and signed into law by President Trump, is poised to significantly affect California.

State health officials estimate that up to 3.4 million individuals could lose their insurance due to what Governor Gavin Newsom refers to as a “manual verification maze.” This is especially relevant for Medi-Cal recipients who need to verify their employment status every six months, or demonstrate they are attending school or volunteering for at least 80 hours.

“It’ll be much more difficult to keep insured,” said Martha Santana Chin, who leads a health plan catering to about 2.3 million Medi-Cal patients in Los Angeles County.

She mentioned that potentially 1 million people, or around 20% to 40% of their members, might find themselves without coverage.

The introduction of work requirements marks the first time in Medicaid’s history that subsidized health insurance for people with disabilities is tied to employment. This impacts low-income Americans.

It’s largely uncharted territory, and there’s uncertainty surrounding how California’s 5.1 million Medi-Cal recipients will manage to prove their employment status and meet these new requirements.

Starting after the 2026 midterm elections, millions of healthy adults will need to meet job requirements every six months to continue qualifying for Medicaid. While there are some exceptions—like for pregnant individuals, those in addiction treatment, or parents caring for young children—most will be affected.

Democrats argue that job requirements can create bureaucratic hurdles that hinder eligible individuals from maintaining their health insurance. On the other hand, Republicans assert that these requirements encourage healthier individuals to seek employment, ensuring that Medicaid resources are available for those who truly need them.

“If you clean it and clean it, you’ll save a lot of money,” said Mike Johnson, Speaker of the Louisiana House. “You’re restoring dignity to work for young men who need jobs rather than spending all day playing video games.”

Only a few states, like New Hampshire, Arkansas, and Georgia, have attempted to implement such work requirements for Medicaid recipients. In Arkansas, a study found that within the first three months of a similar program, 18,000 individuals lost their health coverage.

Joan Alker, a Georgetown University professor studying Medicaid, pointed out that people could lose coverage for various reasons. Some may mistakenly believe they are no longer eligible due to changes in rules, while others struggle to verify their status because of fluctuating incomes and informal payment methods. Some individuals struggle with technology or paperwork, and others do not appeal their rejections.

About a third of California’s 15 million Medi-Cal recipients will need to prove employment, with those affected earning relatively low incomes—below $21,000 for individuals and under $43,000 for families of four.

Estimations of the potential 3.4 million individuals losing coverage are informed by outcomes in Arkansas and New Hampshire.

However, these programs were short-lived, overturned in court, and lacked coordinated national efforts to discern best practices, according to Ryan Long, director of Congressional relations at the conservative Paragon Health Institute.

Long suggests reducing barriers to job verification through technological advancements and job requirements, highlighting a budget proposal for $200 million in grants to ready states for necessary system updates.

He dismissed liberal concerns about healthcare loss as a “strawman argument,” asserting that these groups understand the necessity of work requirements for benefits.

A recent poll by KFF Health Research Group revealed that about 62% of American adults favor Medicaid eligibility tied to work requirements.

However, only about one in three respondents indicated that “most people on Medicaid are already working, and many are at risk of losing coverage due to the burdensome paperwork for proving eligibility.”

Governor Newsom has cautioned that some Californians might face the daunting task of completing 36-page forms to retain their insurance. During a press conference, he showed reporters examples of the extensive paperwork needed for eligibility checks.

Experts believe it’s premature to determine how verification systems will function, as federal guidelines won’t be finalized for months to come.

Inquiries directed to the state’s Department of Health Services, which oversees Medi-Cal, resulted in a statement indicating they are still evaluating the overall impact of the work requirements.

“The notion that people will be submitting paperwork every six months remains uncertain,” Long noted.

Georgia is currently the only state with established permanent work requirements for Medicaid. Over two years ago, it mandated that to qualify, individuals must work a minimum of 80 hours a month and earn below the federal poverty threshold (approximately $15,000 for individuals and $31,200 for families of four).

Since the program launched in July 2023, over 100,000 people have applied for benefits, according to the latest data from the state.

Thus far, the Medicaid initiative has incurred more than $100 million in costs, with $26 million directed towards health benefits and over $20 million spent on marketing. KFF Health News has reported on this, and Georgia Democrats are calling for investigations into the program’s implications.

In California’s Inland Empire, which offers Medi-Cal to around 1.5 million residents in San Bernardino and Riverside counties, officials estimate that up to 150,000 members could face coverage loss due to the work requirements.

Jarrod McNaughton, CEO of the Inland Empire Health Plan, expressed concerns that the eligibility process remains unclear and that they have not yet received guidance on how to implement these requirements.

Will it all be handled online? Will paper submissions be necessary? “We just don’t have those answers yet, as everything is still very much in flux,” McNaughton stated.

In the meantime, the Health Planning Foundation is striving to make the necessary adjustments as seamless as possible to better connect those who need health insurance with volunteer opportunities.