When President Donald Trump signed a sweeping law adding federal work requirements to Medicaid eligibility, supporters touted the move as a way to promote personal responsibility. However, for at least 14 states already developing or implementing their versions of work requirements, the federal mandate has thrown a wrench into years of planning.
States like Georgia, Arkansas, and Arizona — each at different stages of enforcing or proposing work requirements — now face a new reality: the federal statute, set to take effect by the end of 2026, could limit their flexibility. Health policy experts say the new law has established both the floor and ceiling for Medicaid work rules, leaving states little room for innovation or customization.
“The statute sets both the floor and ceiling,” said Sara Rosenbaum, a health law and policy professor at George Washington University, emphasizing that federal standards may override state-specific proposals.
South Dakota is one such casualty. Officials there recently abandoned plans to seek a Medicaid waiver for work requirements, citing concerns that the state’s more lenient approach wouldn’t pass muster under the new federal law. The Department of Social Services warned that continuing with the proposal could be “an exercise in futility.”
Meanwhile, Arkansas and Arizona are pushing forward with stricter-than-federal applications. Arkansas’ plan, currently under federal review, includes no exemptions — a clear departure from the national framework. Arizona’s proposal goes even further, seeking to cap Medicaid benefits at a five-year lifetime maximum for able-bodied adults.
Federal officials have not yet ruled on these more aggressive policies. Andrew Nixon, spokesperson for the U.S. Department of Health and Human Services, confirmed that the agency is evaluating how state waivers align with the new federal standards. Formal guidance is expected by June 2026.
“We don’t exactly know what that will cover,” said Elizabeth Hinton, a Medicaid policy expert at KFF, a nonprofit health policy organization. “But we are aware that some folks think there is no wiggle room here.”
States that want to tailor Medicaid rules must apply for federal demonstration waivers — a mechanism designed to test policy innovations. Yet these waivers now face increased scrutiny, especially for states that either exceed or fall short of federal requirements.
Among the states with active or planned applications are Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kentucky, Montana, New Hampshire, North Carolina, Ohio, South Carolina, South Dakota, and Utah.
Montana is the first state to draft a waiver since the federal law passed. Its proposal mirrors the federal 80-hour-per-month work requirement but adds state-specific exemptions, including for individuals experiencing homelessness or fleeing domestic violence. The bipartisan compromise helped lawmakers permanently extend the state’s Medicaid expansion earlier this year.
“The state should have a say,” said Republican state Sen. Gayle Lammers. “We’re very independent, and everyone is different.”
Georgia is currently the only state with an active Medicaid work requirement — through its “Pathways to Coverage” program — but even that is under review. The state has requested permission to reduce the frequency of reporting from monthly to annual checks, diverging from the federal six-month standard. Unless the Centers for Medicare & Medicaid Services approves this change, Georgia’s program is set to expire at the end of September.
“We’re still awaiting clarification,” said Fiona Roberts, spokesperson for Georgia’s Medicaid agency. “We’re in limbo, just like everyone else.”
South Carolina, which has not expanded Medicaid under the Affordable Care Act, submitted a proposal in June for a partial expansion that includes work requirements largely aligned with the federal law. Governor Henry McMaster described it as “a state-specific solution” in a letter to Health and Human Services Secretary Robert F. Kennedy Jr.
Yet with the new federal law setting strict boundaries, such solutions may prove more symbolic than practical.
The future of state-level experimentation in Medicaid appears constrained, with legal and bureaucratic hurdles ahead. While Republican-led states may still pursue stricter rules, experts predict legal challenges will follow. Tara Sklar, a health law professor at the University of Arizona, said the five-year limit in Arizona’s proposal might stand apart from work requirements and be viewed separately under federal review. Even so, she added, any stricter mandates will likely face court scrutiny.
As states wait for federal guidance in the coming months, one thing is clear: Washington has tightened its grip on a once-flexible aspect of Medicaid policy, leaving less room for states to chart their own course.
