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Work Requirements Under HR 1: Implications for New York

  • Writer: Sally Dreslin & Adrienne Anderson
    Sally Dreslin & Adrienne Anderson
  • 2 hours ago
  • 25 min read

Issue Brief by Sally Dreslin and Adrienne Anderson


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Introduction

 

The One Big Beautiful Big Act (HR 1), enacted in July 2025, changed eligibility criteria related to both immigration status and “community engagement” for various federal benefits programs and established the most significant national eligibility-related reporting requirements to date. “Community engagement requirements” are often called “work requirements.” This paper uses these terms interchangeably.

Critically, although we are focusing in this Issue Brief only on work requirements, HR 1 categorically excluded many previously eligible, lawfully present immigrants from government benefit programs. HR 1 increased the frequency of recertification (i.e., the process of demonstrating eligibility for government programs) and added or expanded work requirements as conditions of eligibility, with some exceptions, for individuals enrolled in Medicaid who became eligible because their state adopted the ACA’s expanded eligibility option under the ACA, i.e., the “expansion population,” and for a broader age range of SNAP recipients. In New York, these two impacted populations include roughly 844,000 people.[1] An important nuance to appreciate as we begin this discussion is that there are impacts on beneficiaries from both the work requirements themselves and from the reporting requirements. The new recertification cadence and the work requirements, described in the next section, go into effect January 1, 2027.

The Trump administration frames tightening eligibility for public benefits such as Medicaid, food assistance through SNAP, or cash assistance through TANF as fiscally responsible and cost-saving by reducing enrollment and costs, in turn. The HHS economic report accompanying the Interim Final Rule, Medicaid Work Requirements Incentivize Employment and Are Estimated to Reduce Poverty, also articulates the administration’s moralistic motivations:

“The U.S. safety net has been widely criticized for disincentivizing work. By requiring work from those who are able, it can be used to both promote employment and help individuals overcome economic circumstances and lead productive and fulfilling lives.”

The Commonwealth Fund published an “Explainer” in September 2025, after the enactment of HR 1 but before the release of the federal Rules issued on June 1, 2026, guiding the implementation of the new requirements, which examines work requirements for Medicaid enrollees. Prior to HR 1, two states, Arkansas and Georgia, had implemented work requirements for their Medicaid programs, and several other states had received federal approval but had not implemented their programs.

Arkansas’ requirements, which began in June 2018, applied to non-disabled, childless adults between 19 and 49 years (with implementation phased in by age groups) with incomes less than 100 percent of the Federal Poverty Limit (FPL). The requirement ended in March 2019 as a result of a court order that deemed the federal approval of Arkansas’ 1115 waiver to implement the initiative, as well as those of Kentucky and New Hampshire, “arbitrary and capricious” because the scope of the changes to the Medicaid programs produced by the work requirements fell outside the scope of the 1115 waiver authority and did not promote the “basic purpose” of the Medicaid program of providing medical assistance to individuals lacking the necessary income and resources.[2] In Arkansas, as we will discuss further in this Brief, over 18,164[3] (7.3%) of the 247,374[4] Medicaid beneficiaries assigned to the work program lost their coverage during the first seven months the requirement was in place (the requirement was in effect for nine months). Arkansas was aggressive in its penalties for non-compliance, whether the non-compliance was due to an individual’s inability to work or to report their work was perhaps irrelevant, and the State’s Medicaid program “disenrolled beneficiaries after three months of non-compliance and prevented them from reenrolling until the following calendar year.”[5] Georgia’s Medicaid work requirement was implemented in July 2023 as part of its alternative program to Medicaid expansion and remains in effect, although it may require changes to adhere to the recently-released HR 1 implementation Rule.

Indeed, employment generally produces improvements in economic circumstances, and often in personal fulfillment, but the subtext of messaging that “safety net” programs are widely benefiting those who are unemployed, uninterested in employment, and undeserving of assistance, as put forth in the economic report accompanying the Interim Final Rule quoted above, is neither true nor responsible. The majority of Medicaid beneficiaries are working; those who are not working generally report reasons for not working (see figure below) that would not subject them to scrutiny but for their socioeconomic class.

Source: 5 Key Facts About Medicaid Work Requirements. KFF. February 18, 2025.

Who is Impacted by HR 1’s Medicaid Community Engagement Requirements?  

On June 1, 2026, the Centers for Medicare and Medicaid Services (CMS) issued the Interim Final Rule that guides States’ implementation of Medicaid “community engagement requirement for certain individuals.” The regulations are effective on July 31, 2026, which is the last date by which comments will be accepted, indicating that it is unlikely the Rule will be amended due to public comments. The Interim Final Rule was exempted from the standard public notice and comment periods due to the compressed implementation timeline, per CMS (although the agency itself established the timeline). The HR 1 federal budget reconciliation law, also referred to by CMS as the Working Families Tax Cut legislation and Public Law 119-21, requires states that expanded or partially expanded their Medicaid eligibility under the ACA to incorporate the “demonstration [of] community engagement as a condition of Medicaid eligibility”[6] by January 1, 2027, or sooner at state option. Those impacted are non-pregnant adults aged 19 to 64 with incomes up to 133% of the FPL who became eligible for coverage under the ACA’s Medicaid expansion, as well as enrollees in states with partial expansion waiver programs.

Per the rule, activities that qualify as meeting the monthly community engagement requirement are: working, completing community service, or participating in a work program for at least 80 hours; enrolling in an educational program at least half-time; completing a combination of the activities described above for at least 80 hours; has a monthly income that exceeds the federal minimum wage multiplied by 80 hours; is a seasonal worker and has an average monthly income over six months that exceeds the federal minimum wage multiplied by 80 hours, or meeting an exemption.[7] Eighty hours of work per month at the current federal minimum wage of $7.25 would yield $580 per month in earned income. But as we described last November in “How Many New Yorkers Will Become Uninsured Due to the One Big Beautiful Bill Act?”, the minimum wage is $17 per hour in New York City, Long Island, and Westchester, and $16 per hour in the rest of the state as of January 1, 2026, so “an individual would only need to work approximately 33 hours to earn the equivalent of 80 hours at the federal minimum wage and to qualify for this exemption.”

Exemptions

Exemptions from the work requirements are specified for any individual who is:

A.     A former foster child

B.     “Indian” per § 447.51

C.     A parent, guardian, caretaker relative, or family caregiver who provides regular care to a dependent child or person with a disability, including certain relatives and non-relatives who provide substantial ongoing assistance

D.    A veteran with a temporary or permanent disability from the Department of Veterans Affairs, rated as 100 percent (total) under 38 U.S.C. 1155

E.     Medically frail or otherwise has special medical needs[8]

F.     Compliant with any requirements imposed by the State, in accordance with section 407 of the Act (i.e., meet TANF work requirements)

G.    A member of a household that receives Supplemental Nutrition Assistance Program (SNAP) benefits under 7 U.S.C. 2015 and is not exempt from a work requirement under such Act

H.    Participating in a drug or alcohol treatment and rehabilitation program, as defined in section 3(h) of the Food and Nutrition Act of 2008 (7 U.S.C. 2012(h)). States may establish a minimum time commitment, consistent with appropriate clinical guidelines, for participation in such a program

I.       An inmate of a public institution, as defined at § 435.1010

J.      Pregnant or entitled to postpartum medical assistance under section 1902(e)(5) or (16) of the Act

K.     Plus, option to allow short-term hardship exception

Medical Frailty: Some Background

States whose Medicaid programs offer Alternative Benefit Plans, plans intended to be tailored to the unique needs of certain groups, may have processes in place related to designations of serious and complex conditions in the context of medical frailty. Under the ACA, states that expanded Medicaid were required to have Alternative Benefit Plans (ABPs). The ABPs may be different from the state’s traditional Medicaid offerings but must at least offer the ACA’s Essential Health Benefits (EHBs). If the expansion population ABP offers different benefits than what is offered to non-expansion Medicaid members, the state has to offer a choice to individuals who are designated as “medically frail,” between an EHB-ABP and a traditional benefit-ABP. According to the National Center for Housing + Health, there are just 12 states that offer an EHB-ABP and therefore have a medical frailty designation.

New York does not have a definition of “medically frail” for adults. New York’s Alternative Benefit Plan for the ACA expansion population offers traditional state plan services, so there is no need to identify individuals who are “medically frail” to offer them a choice of plans.

The HR 1 reconciliation law (Public Law 119-21) includes language that exempts individuals from work requirements who are medically frail[9] or who otherwise have special medical needs:

‘‘(V) who is medically frail or otherwise has special medical needs (as defined by the Secretary), including an individual—

(aa) who is blind or disabled (as defined in section 1614);

(bb) with a substance use disorder;

(cc) with a disabling mental disorder;

(dd) with a physical, intellectual or developmental disability that significantly impairs their ability to perform 1 or more activities of daily living; or

(ee) with a serious or complex medical condition;”

Medical Frailty in the Interim Final Rule

States had anticipated the federal determination of “medical frailty” to be similar to what states currently use when determining if an individual must be offered a choice related to enrollment in an ABP, described above. But the Interim Final Rule to implement the law adds significant restrictive qualifications to the definition of medical frailty:[10] 

“(i) An individual who is medically frail or otherwise has special medical needs is defined as an individual whose physical, mental, or other behavioral health condition significantly impairs the individual’s ability to comply with the community engagement requirement in this subpart and is an individual:

(A) Who is blind or disabled (as defined in section 1614 of the Social Security Act);

(B) With a substance use disorder, excluding an individual in stable recovery (which means, an individual who is in recovery for 5 or more years);

(C) With a disabling mental disorder;

(D) With a physical, intellectual, or developmental disability that significantly impairs their ability to perform one or more activities of daily living; or

(E) With a serious or complex medical condition which is a medical condition that is life threatening, seriously disabling without necessarily being life threatening, causing significant pain or discomfort that can cause serious interruptions to life activities, requiring a major time or effort commitment from caregivers for a substantial period of time, requiring frequent monitoring, associated with severe consequences or negative consequences for someone else, affecting multiple organ systems, requiring management to tight physiological parameters, requiring coordination of multiple specialties, requiring treatment that carries a risk of serious complications, or requiring adjustment in non-medical environments. [emphasis added]”

In anticipation of a potential change in course from the federal administration, on May 29, 2026, days before the Interim Final Rule was issued, Gov. Hochul co-signed with five other governors a letter to HHS Secretary Robert F. Kennedy Jr., requesting “that your department confirm that, should the forthcoming Interim Final Rule (IFR) introduce substantive policy changes that diverge from states’ reasonable working assumptions, an appropriate timeline is afforded states to make these significant policy and technology changes; and, second, we request that your department provide a formal written response to our outstanding guidance requests before June 1, 2026, to support timely state planning.”[11]

CMS’s Interim Final Rule focuses not on specific diseases or conditions per se, but rather on the extent to which the individual’s health status is compromised enough to impact their ability to fulfill the requirement, noting, “medical frailty will depend on the condition significantly impairing their ability to comply with the community engagement requirement.”[12] The Interim Final Rule directs states to not automatically exempt individuals from work requirements solely on the basis of having a certain diagnosis or medical condition that could be serious or complex, and directs states to use lists of diseases and conditions to help define individuals who potentially would qualify for medical frailty exemption if they meet the standard of having a significantly impaired ability to comply with community engagement due to the status of their disease process.[13] The federal administration projects that “Over time and with advances in treatment, we expect that the number of individuals who are determined to be medically frail by States will decline and then stabilize.”[14] The natural question, of course, is whether this vulnerable population will actually have access to those advanced medical treatments?

The primary focus of the new rule is not that a person is diagnosed with a serious or complex medical condition from a list of such conditions, but rather, the current extent to which the condition impacts one’s ability to engage in community or work activities. This reorientation will have significant downstream impacts for individuals as they seek to meet Medicaid eligibility and reporting requirements, on healthcare providers who may find themselves in an unprecedented situation of judging the impact of medical conditions on a given patient’s ability to work, and on state Medicaid programs to identify the least burdensome method to determine medical frailty.

Determining Medical Frailty

The new work requirements included in the HR 1 reconciliation law are expected by the Congressional Budget Office (CBO) to reduce federal Medicaid spending by $326 billion (of the total Medicaid spending reduction of $911 billion) over 10 years.[15] The CBO estimates that the reduced Medicaid enrollment that will result in the reduced spending, whether because an individual cannot fulfill the work/community engagement requirements or because they cannot demonstrate their compliance with the requirements, will represent coverage loss for 5.3 million people by 2034.[16]

More urgently, an analysis by the Robert Wood Johnson Foundation (RWJF) produced prior to the issuance of the surprisingly restrictive definition of medical frailty in the Interim Final Rule, found that nationally:

“Between 4.9 and 10.1 million people will lose Medicaid coverage in 2028 due to work requirements and more frequent eligibility checks under high and low mitigation scenarios, respectively. 

· Between 2 and 3.1 million will lose coverage due to their eligibility being redetermined more frequently.

· Between 3 and 7 million people will lose Medicaid coverage due to work requirements alone, after accounting for the impact of more frequent eligibility checks.” 

The RWJF analysis includes a state-specific table of the projected decline in enrollment resulting from three different levels of state mitigation approaches (we have included a portion of the table that includes New York):

To determine work requirement compliance, States must begin outreach to Medicaid enrollees four to six months prior[17] to the effective date of January 1, 2027, and they are instructed by CMS to use a “data first” approach, utilizing as much existing data as possible to verify compliance. As RWJF explains in its analysis, states will need data related to a variety of activities, including:

“(1) work hours and/or income, including for the self-employed and gig workers; (2) the full range of potential health exemptions; (3) school enrollment; (4) exemption for SNAP work requirements; (5) caregiving status; (6) presence of children age 13 and younger in the household; and (7) community service activities. We find that the narrower the exemption criteria are for specific health diagnoses, the greater the potential coverage losses, including among those with chronic care needs who rely on ongoing care to maintain their health and functioning. Conversely, adopting a broad definition of serious or complex medical conditions could expand exemptions to more adults with ongoing chronic care needs who would face serious health risks if they lose coverage.”

As we see from the RWJF table above, the extent of mitigation in defining and determining “medical frailty” is a critical variable, given the relative lack of a standard definition. More challenging, however, will be evaluating the extent to which an individual’s medical frailty, once determined, interferes with their ability to comply with the work requirements. Who will make the determination, every six months, whether the individual qualifies for, i.e., is sick enough for, an exemption? Initially, through 2027, an individual may self-attest that they meet medical frailty criteria, but ultimately, the state will need to work with claims data, managed care organizations, and providers to develop a process that is not only accurate and reliable, but also accessible, fair, and does not contribute to disenrollment because of its complexity. To borrow a phrase we first encountered in an article by Robyn Nicole Sanders, we cannot, as a state, allow “process to become punishment.”

Options for Compliance

The federal administration's framing of the expanded requirements assumes that they will nudge non-working enrollees into employment. But the labor market those enrollees would be entering is considerably more difficult than that framing suggests. Individuals who rely on Medicaid coverage, do not qualify for an exemption, and cannot find full-time employment will need to enroll in an education or job training program, or find a reliable volunteer opportunity to fulfill the requirements. Community colleges, which typically offer part-time programming and job training, can provide proof of an individual’s enrollment or participation, and often offer services to help students access social supports for themselves and their families.

Indeed, New York is better positioned than most states to offer educational pathways to compliance, given the scale and accessibility of CUNY and SUNY. Both systems offer low- or no-cost programming, part-time enrollment options, and job training that would satisfy the requirement, and CUNY in particular serves a student body that substantially overlaps with the Medicaid expansion population. In addition to traditional offerings for young adults, the “Reconnect” program is available to adult students 25-55 years of age at CUNY and SUNY. Ideally, it could be expanded to 65 to serve the full Medicaid expansion population age range.

Still, enrollment in a community college, however affordable, does not put food on the table in the near term. For Medicaid members who are not working, the more pressing need is income, especially as expanded eligibility requirements for SNAP—described in the next section—take effect. Education, however valuable as a long-term path out of poverty, does not address that immediate reality, especially in a labor market that is especially challenging for new graduates.[18] Ultimately, there is still a gulf between the activities that satisfy the community engagement requirement and what actually helps an individual and their dependents achieve stability.

NY State of Health's "Stay Covered" page is the State's primary public-facing communication to Medicaid members about expanded requirements and their impact on enrollees. It explains the qualifying activities and exemptions in plain language, lays out a clear timeline of relevant dates, and directs members to update their contact information so the state can reach them before the September 2026 outreach deadline. It also provides a customer service number, a live chat option, and a link to find local enrollment assistors. It remains to be seen whether the State will add direct linkages to resources that can help members meet community engagement requirements (e.g., volunteer placements, workforce programs) or whether existing Medicaid infrastructure, like the Social Care Networks established in the State’s current 1115 waiver program, will be tasked with helping members navigate their options.

ASPE Report

Alongside CMS’s Interim Final Rule, HHS's Office of the Assistant Secretary for Planning and Evaluation (ASPE) published a report, Medicaid Work Requirements Incentivize Employment and Are Estimated to Reduce Poverty, estimating that Medicaid work requirements would lift 1.6 to 2.9 million people out of poverty by encouraging work and higher earnings.[19] The report itself is heavily qualified. Its authors acknowledge that "some Medicaid recipients may face substantial barriers to employment," that benefits are "contingent on how states implement the requirements," including job training supports, streamlined verification, and "enough employment opportunities," and that its results "are simulated calculations, not necessarily what is or will occur in the real world."[20] These critical caveats, especially the presumption of adequate employment opportunities, fundamentally undermine their case.

The models assume that currently non-compliant adults will increase their work hours to comply; in one scenario, all eligible adults "immediately find adequate employment." Neither scenario modeled accounts for working or exempt enrollees losing coverage through documentation failures, which has been the dominant mechanism of coverage loss in prior experience. The report also suggests that "primary care clinics and community pharmacies can also support work verification," an acknowledgment that compliance documentation is expected to spill into clinical settings, adding both clinical and administrative responsibilities to the plates of stretched-thin safety-net providers.

The empirical record does not support the report's conclusions. In Arkansas's 2018 demonstration, roughly 18,000 people lost coverage within months, largely for failure to submit documentation, and peer-reviewed studies found no increase in employment. About 95 percent of the target population was already working or exempt.[21],[22] Economists Chloe East and Adrianna McIntyre point out that the ASPE report does not discuss these studies, relying instead on TANF and housing evaluations, many from the 1990s, and omits the contemporary SNAP work requirement literature, which finds no employment gains and participation drops of 15% to over 50%. They also point out that the report’s assumed annual earnings gain of $16,780 per responding household is more than ten times the largest effect found in the report's own technical appendix.[23] Projections specific to the new requirements are directionally consistent: the Urban Institute and RWJF estimate disenrollment of 19%-37% among working adults subject to the requirement.[24]

The report's own caveats matter for New York. ASPE conditions its projected benefits on streamlined verification, employment supports, "enough employment opportunities," and simultaneous "pro-growth economic policies" to ensure job availability, and warns that recipients with minimal job training "would face significant challenges in jurisdictions that require high minimum wages and impose restrictive licensure requirements."

By the report's own criteria, New York, with one of the nation's highest minimum wages, extensive occupational licensure requirements (and no inter-state licensure agreements), no integrated eligibility system, and flat or flattening employment in the sectors in which most dual beneficiaries work (see FPI discussion below), is among the jurisdictions where the requirements are least likely to deliver the federal administration’s projected benefits.

Medicaid Requirements in the Context of SNAP Requirements

The Medicaid community engagement reporting requirement authorized under HR 1 is not new in isolation. New York is already several months into implementing HR 1’s expansion of SNAP work requirements for Able-Bodied Adults Without Dependents (ABAWDs). The early SNAP experience offers the closest available preview of how work requirements will play out for the Medicaid expansion population beginning January 1, 2027, and the two sets of requirements are formally linked, as discussed below.

The SNAP-related changes raised the ABAWD age ceiling from 54 to 64, narrowed the caregiver exemption from households with a child under 18 to households with a child under 14, and eliminated longstanding exemptions for veterans, homeless individuals, and youth aging out of foster care.[25] ABAWDs who fail to meet the 80-hour-per-month work, training, or community service requirement are limited to three months of benefits within a 36-month period—effectively creating a three-month "grace period" before noncompliance results in disenrollment. New SNAP work requirements took effect March 1, 2026, but because New York operates on a fixed statewide clock, recipients who did not demonstrate compliance in March, April, and May began losing benefits on June 1, 2026.[26]

National SNAP enrollment losses began even before the work requirement provisions were fully in effect and have accelerated since. According to the Center on Budget and Policy Priorities' SNAP Tracker, USDA data from July 2025 to February 2026 show a decline of nearly 9% of the national caseload, before the changes took effect— a decline CBPP attributes to the law rather than reduced need, given flat unemployment. CBPP projects that approximately 4 million people in a typical month will lose some or all of their SNAP benefits once the HR 1 changes are fully implemented.

New York's decline has so far been more moderate but follows the same trajectory. From January 2025 to February 2026, statewide SNAP participation fell 6.2%, or by more than 180,000 people, with New York City participation declining 5.5% (by over 100,000 people) over the same period, even as food insecurity indicators remained elevated.[27] Notably, these and national statistics predate the June 1, 2026, end of the grace period; the NYS Office of Temporary and Disability Assistance (OTDA) has estimated that more than 300,000 New York households will ultimately lose some or all of their SNAP benefits due to inability to meet or document compliance with the new requirements.[28] The chronology here is instructive for Medicaid: substantial enrollment decline for SNAP began with administrative tightening and churn, well before the work requirements directly yielded disenrollments.

The CMS Interim Final Rule directly links the Medicaid and SNAP work requirements:

“If an individual is in a household that receives SNAP benefits and is subject to a work requirement under the SNAP program, they meet the definition of a specified excluded individual and are therefore not an applicable individual subject to the Medicaid community engagement requirement. Unlike the TANF exclusion from community engagement, which requires the State to ensure the individual is compliant with TANF work requirements to meet the definition for the exclusion, for the SNAP exclusion, States only need to determine that the individual is not exempt from SNAP work requirements and is in a household that receives SNAP benefits; the State does not need to confirm that the individual is in fact compliant with SNAP work requirements.”[29]

For dual enrollees, the SNAP work requirement, governed by OTDA's ABAWD rules, becomes the operative work requirement: the State verifies only SNAP receipt and non-exempt status, not actual compliance. The exclusion, however, lasts only as long as SNAP enrollment does. A recipient terminated from SNAP for noncompliance loses the exclusion and becomes directly subject to the Medicaid community engagement requirement.

Enrollment Overlap in the Medicaid Expansion and SNAP Populations

In an analysis of the share of households receiving both Medicaid and SNAP benefits from 2019-2023, New York City was home to 7 of the top 15 Public Use Microdata Area (PUMAs) in the country, which are Census-determined areas of at least 100,000 people.[30]

Using American Community Survey (ACS) data, the Fiscal Policy Institute (FPI) found that just over one million New York households, more than three million people, nearly the entire SNAP caseload, receive both SNAP and Medicaid, including roughly 844,000 adults in the ACA expansion band who will be subject to work requirements under both programs.[31] FPI estimates that 141,431 dual recipients will lose SNAP and 135,301 will lose Medicaid for failure to meet the respective requirements, and identifies 51,359 people who are newly exposed to SNAP work requirements and simultaneously in the expansion band, 99% percent of whom are not currently meeting the Medicaid compliance threshold.

Whether New York can leverage this overlap to streamline reporting processes and preserve coverage (in one or both programs) is another matter. Because the State does not have an integrated eligibility system (IES)–SNAP runs through OTDA and local districts, while expansion-population Medicaid eligibility is determined through NY State of Health–applying the SNAP exemption to Medicaid work reporting requirements will require cross-system data matching that is not possible with resources in place today, yet would need to be operational by January 2027. If it is not, dual enrollees will face documentation demands from both programs at once.

State and City Response to Expanded SNAP Requirements

State leaders have framed the expanded SNAP requirements as a costly federal mandate that will strip benefits from eligible New Yorkers. The Governor’s Office projects that roughly 300,000 New York households will lose some or all of their SNAP benefits, an average loss of about $220 per month, due to the new requirements' administrative complexity, and that up to $1.4 billion in new annual costs will shift to the State and local governments,[32] and Attorney General Leticia James has sued the federal government over SNAP eligibility restrictions established by HR 1.[33] The New York City Mayor’s Office points out that requirements target a problem that largely does not exist:

"Most SNAP recipients already work. Recent data show that 82% of single adult SNAP recipients had earnings, while 91% of SNAP households with children had earnings. Without intervention, New Yorkers stood to lose approximately $823 million in food assistance over the course of a year."[34]

Some 1.7 million New York City residents receive SNAP benefits. City officials have estimated that approximately 126,000 people will need to comply with new reporting requirements and do not qualify for any exemptions. Of that group, more than 80,000 have been able to demonstrate compliance so far,[35] with young, single adults at the highest risk of losing benefits due to noncompliance.[36] On June 1, the day the grace period ended and the first benefit terminations took effect, the Mamdani administration announced that an interagency outreach campaign, including partnerships with more than 100 community-based organizations and CUNY, had helped approximately 223,000 New Yorkers maintain access to SNAP, reducing projected benefit losses by 65%, though roughly 40,000 residents remained at risk of losing benefits as of this writing.[37]

Discussion

The FY 2027 NYS Enacted Budget Financial Plan[38] for the state’s 2027 fiscal year (April 2026 to March 31, 2027) does not make specific estimates related to changes in Medicaid enrollment resulting from the implementation of HR 1’s work requirements. Throughout the document, the Division of Budget refers to “sustained trends of elevated enrollment” [39] or to “enrollment remaining at elevated levels.”[40] In fact, given the implementation date of January 1, 2027, for the work requirements and the ability of Medicaid beneficiaries to self-attest to the medical frailty exemption during 2027, New York may not experience as significant a decline in enrollment as some analyses anticipate, at least during the first three months, or even the first year, of the requirement. 

The FY 27 Enacted budget does include increased NYS DOH State Operations spending of what appears to be $90 million[41] to support the administration of the Medicaid work/community engagement requirements for “certain non-exempted populations.”[42]

Despite its financial investment, New York may face challenges in producing some of the data that will be required for determining compliance or exemption from community requirements due to the state’s fragmented data infrastructure. As mentioned earlier, NY does not have an integrated eligibility system, which would provide a single data source for individuals eligible for and participating in multiple public assistance programs. Without standardized statewide data sharing agreements or memoranda of understanding, a standardized method to identify New Yorkers across the various data systems, or integration across platforms (many of which are built on legacy systems), sharing essential information across state and city agencies will be challenging.[43] The new requirement could be an opportunity, however, to build more collaborative and integrated data platforms across New York, as Connecticut, for example, has been developing for several years.

The extent to which New Yorkers who are subject to the new and expanded Medicaid work requirements will lose their benefits, whether from administrative churn or from a true loss of eligibility, will depend to a significant degree on state policy choices. The impact will be shaped by state decisions related to the list of medical diagnoses and chronic conditions that qualify for medical frailty exemption considerations and how, and by whom, those exemptions will be approved (including the extent to which self-attestation is incorporated into the process), on how many months of compliance or exemption (one to three) will be necessary prior to new enrollment and to each six-month redetermination period, whether the state will allow for optional hardship exceptions, and how comprehensive and effective outreach and engagement activities are to impacted individuals.

States will take varying approaches to implementing work requirements based on their political orientation and the extent of their affinity for the worldview offered by the federal administration as the justification for the new eligibility criteria. Within the constraints of the Interim Final Rule, Democratic-led states will likely opt for a “high mitigation” policy approach, and Republican-led states that adopted the ACA Medicaid expansion in full or in part will likely take more of a “low mitigation” policy approach. For example, Iowa, Montana, and Nebraska are planning to implement their requirements in July 2026, five months earlier than the statutorily required January 1, 2026, and Arkansas will implement a “soft launch” of its requirement in July 2026, as well.[44]

Most states plan on verifying work requirements compliance/exemption every six months, however Indiana and New Hampshire plan to perform these checks every three months.[45] And several states are planning to preclude some or all of the four optional short-term hardship exceptions (such as living in a county with high unemployment rates or one experiencing natural disasters, being admitted to a hospital or nursing facility, or needing to travel out of one’s community to receive medical care for oneself or a family member).[46]

Beyond the impact of state policy decisions, it remains to be seen how active CMS will be in monitoring the states’ implementation of work requirements. States are required to submit data in five categories[47] that are “timely, complete, and of sufficient quality to support monitoring”[48] of their implementation operations. The Interim Final Rule states that the new data that states submit will:

“… assist CMS to maintain high levels of program integrity to ensure States implement the community engagement requirement under section 1902(xx) of the Act and maintain timely and accurate determinations and redeterminations of eligibility for all applicants and beneficiaries.”

CMS will certainly have the authority and information to monitor implementation, and we will see how they use the information submitted by states. Will they apply a standard approach to all, or will they be selective and focus their monitoring and interventions on those states whose Medicaid programs are anathema to their philosophical perspective?

The messaging of the ASPE economic report described earlier, and other rhetoric from the administration, is grounded in an assumption of moral hazard – specifically that the American safety net has broadly disincentivized work and productivity and has led to isolation, dependency, and lack of confidence among individuals receiving public assistance. Their solution, community engagement requirements, is framed as helping individuals "lead productive and fulfilling lives.” As documented throughout this Brief, this premise of empowerment is not supported by the evidence.

New York has a longstanding commitment to health equity and to addressing the social determinants of health, reflecting an understanding that health outcomes are shaped by circumstances, not character. That mission is evident in the State’s choices within its current 1115 waiver and the intention behind the Social Care Networks, and throughout the broader Medicaid program. We expect that New York will continue to make policy choices that reflect both these values and the reality that the facts present.


 

Endnotes


[3] Ibid.

[5] Ibid, p. 4.

[6] 42 CFR Parts 431, 435, 438, 457, and 600. Medicaid Program; Community Engagement Requirement for Certain Individuals. Department of Health and Human Services, Centers for Medicare & Medicaid Services. p. 9.

[9] H.R. 1, 119th Cong., § 71119 (a)(9)(A)(ii)(V) (2025). https://www.congress.gov/bill/119th-congress/house-bill/1/text

[10] 42 CFR Parts 431, 435, 438, 457, and 600. Medicaid Program; Community Engagement Requirement for Certain Individuals. Department of Health and Human Services, Centers for Medicare & Medicaid Services. p. 125.

[12] P. 93.

[13] P. 94.

[14] P. 95.

[16] Ibid.

[17] “Section 435.561(b)(1) and (2) newly requires States to send notices to beneficiaries 4, 5, or 6 months prior to the community engagement requirement becoming effective in the State and to beneficiaries who apply and enroll after the initial outreach notice is sent, but before the community engagement requirement becomes effective in the State.” Medicaid Program; Community Engagement Requirement for Certain Individuals.

[18] The Labor Market for Recent College Graduates. Federal Reserve Bank of New York.

[19] Medicaid Work Requirements Incentivize Employment and Are Estimated to Reduce Poverty. Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. June 2026.

[20] Ibid.

[22] Trump Administration Announces Stricter Rules for Medicaid Work Requirement. Margot Sanger-Katz and Sarah Kliff. The New York Times. June 1, 2026

[23] The Trump Administration's Dubious Case for Work Requirements. Chloe East and Adrianna McIntyre. Can We Still Govern? Don Moynihan, Substack. June 9, 2026.

[24] Millions Could Lose Health Coverage Due to New Rules. Urban Institute and Robert Wood Johnson Foundation. March 2026.

[25] SNAP Work Requirements. New York State Office of Temporary and Disability Assistance.

[28] Ibid.

[29] Medicaid Program; Community Engagement Requirement for Certain Individuals. 91 Fed. Reg.  (Interim Final Rule with Comment Period), CMS-2454-IFC. Centers for Medicare and Medicaid Services. June 3, 2026. P. 96.

[36] Ibid.

[38] FY 2027 New York State Enacted Budget Financial Plan. Governor Kathy Hochul and Budget Director Blake G. Washington. June 2026.

[39] P. 9.

[40] P. 12.

[41] P. 32.

[42] P. 123.

[43] For example: the NYS Department of Health’s Office of Health Insurance Programs, Office of Temporary Disability and Assistance, Department of Labor, SUNY, CUNY, Department of Taxation and Finance, and others with relevant implementation information.

[45] Ibid.

[46] Ibid.

[47] There are five categories of data that states are required to submit: “(1) enrollment totals of individuals applying for and receiving medical assistance; (2) application and renewal processing, timeliness, and backlogs; (3) outcomes of determinations and redeterminations eligibility; (4) populations subject to and their compliance with the requirements of section 1902(xx) of the Act; and (5) other such data specified by CMS in regulation, guidance, or technical specifications to monitor implementation and the impact of community engagement.” § 435.562(d)

 



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