What We Know About States Skipping Medicaid Hardship Exemptions

New federal work requirements for Medicaid take effect January 1, and some conservative-led states have decided not to use a hardship exemption that could let struggling residents keep their coverage, according to reporting by The Guardian citing research from the healthcare policy nonprofit KFF.

Missouri and Iowa are among the states that have counties qualifying for the exemption but have chosen not to adopt it, the Guardian reports. Experts told the outlet the decision may come down to politics as much as paperwork.

What changes for Medicaid recipients on January 1?

Starting January 1, adults who got their Medicaid coverage through the Affordable Care Act's Medicaid expansion will have to prove they are working, going to school, volunteering, or doing another qualifying activity for at least 80 hours a month, according to the Guardian. Anyone who can't show that will risk losing coverage.

The law that created the new rule also built in exemptions for people who hit hard times. Those exemptions are supposed to cover Medicaid enrollees who are hospitalized, who have to travel for medical treatment, or who live in areas hit by disasters or high unemployment, the Guardian reports.

What is the hardship exemption supposed to do?

The hardship exemption lets states pause the work requirement for people in specific, documented situations rather than cutting them off from coverage automatically. New York City is using it now. The city adopted the high-unemployment version of the exemption for the Bronx, where about 200,000 residents would otherwise have had to meet the new work rule, according to the Guardian.

That is the kind of relief the exemption is designed to provide: a way to keep coverage for people in counties where jobs are scarce, even if they can't log 80 hours a month doing something else.

Which states are declining to use the exemption?

Missouri and Iowa have counties that would qualify for the high-unemployment exemption, but state officials in both have not adopted it, per the KFF research cited by the Guardian. The Guardian said it contacted both state health departments for comment.

Why are some states skipping it?

Jennifer Tolbert, deputy director of KFF's Program on Medicaid and the Uninsured, told the Guardian that ideology may be driving the decision in some states. "If [state officials] are advocates of work requirements, they may feel like these work requirements should apply to..." Tolbert said, according to the Guardian.

"If [state officials] are advocates of work requirements, they may feel like these work requirements should apply to..." — Jennifer Tolbert, KFF deputy director, Program on Medicaid and the Uninsured

The Guardian also reported that some states may be avoiding the exemption because of the extra administrative work involved in tracking unemployment data county by county and processing exemption claims.

What does this mean for residents on Monday?

For Medicaid enrollees in Missouri and Iowa counties with high unemployment, the practical effect is that there is no automatic pause button once the work requirement starts January 1. Someone who can't find 80 hours a month of qualifying activity in a county with few jobs will still need to meet the requirement, document another exemption category such as hospitalization or disaster impact, or risk losing coverage.

In the Bronx, roughly 200,000 residents are shielded from that outcome because New York City adopted the exemption, the Guardian reports. No comparable figure for Missouri or Iowa residents in similarly situated counties was available in the source material.

By the numbers

• 80 hours a month — the minimum work, school, or volunteer activity required to keep ACA-expansion Medicaid coverage starting January 1, per the Guardian.
• About 200,000 — Bronx residents exempted from the new work requirement after New York City adopted the high-unemployment hardship exemption, according to the Guardian.
• January 1, 2026 — the date the federal work requirement takes effect, per the Guardian's reporting.

What's next

The Guardian reported it had reached out to Missouri and Iowa state health departments for comment and had not yet received responses at the time of publication. Whether other states with qualifying high-unemployment counties will follow New York City's lead, or stick with Missouri and Iowa's approach, remains to be seen as the January 1 deadline approaches.