Minnesotans between the ages of 21 and 64 who apply for Medicaid will need to demonstrate that they have been working, attending school or volunteering for at least 80 hours each month to qualify for or retain health insurance under the joint federal-state program.
This requirement follows President Trump’s signing of HR. 1 into law, a sweeping tax and spending bill, last July.
The new law is set to take effect on Jan. 1, 2027, leaving Minnesota lawmakers grappling with how to implement changes to the state’s administration of Medicaid funds before the legislative session ends on May 18.
Both Democrats and Republicans in the Legislature said they need to either pass legislation or update existing rules soon to ensure that state programs comply with the U.S. Centers for Medicare & Medicaid Services new requirements.
But some state legislators have raised concerns about the lack of clear guidance from CMS on how to implement the upcoming work requirement changes.
This uncertainty puts the state at risk of noncompliance, which could result in the loss of Medicaid matching funds, the percentage of state spending matched by the federal government.
To meet the upcoming deadline, Minnesota needs to quickly implement a plan to upgrade agency databases and modernize verification processes.
Sen. Melissa Wiklund, DFL-Bloomington, chair of the Senate Health and Human Services Committee, said lawmakers are working on proposals to address impacts of HR. 1.
“DHS has received some guidance from the federal government, but they haven't received all the final guidance on how to implement some of these provisions, and that is making it tricky for us because our session is fixed in time,” Wiklund said. “So, we have to get something created and passed before our adjournment date.”
‘The clock is ticking’
The new federal law includes the largest cut to Medicaid in history, reducing funding by $1 trillion. As a result, nearly 12 million Americans are expected to become uninsured over the next decade, and according to Minnesota health officials, an estimated 140,000 Minnesotans are likely to lose health coverage.
These upcoming cuts come in addition to a federal hold on $243 million of Medicaid funding that the Trump administration imposed because of possible fraud in state programs. This funding has not yet been released by CMS, despite the federal government approving the state’s corrective action plan aimed at preventing fraud.
Medicaid, known as Medical Assistance in Minnesota, provides health coverage for about 1.2 million residents, offering affordable health insurance to more than one in five Minnesotans, including children, people with disabilities and seniors.
To qualify for Medical Assistance, individuals must meet specific income requirements based on factors such as age, pregnancy status and family size. Enrollees do not pay a premium for coverage, nor do they share costs for comprehensive health services.
A 2023 analysis by KFF shows that most Medicaid enrollees in the U.S. are employed.
Specifically, 92 percent of adults under the age of 65 are working full-time, while 64 percent are working part-time or are not working due to caregiving responsibilities, illness, disability or attending school. The remaining 8 percent of adult Medicaid recipients indicated that they are retired, unable to find work or not working for other reasons.
Currently, Medicaid enrollees are required to prove their eligibility at least once a year. But the new law will change this, mandating that states check recipients' eligibility every six months. This means more paperwork and consequently, some people may lose their eligibility or decide to opt out of Medicaid as these changes roll out over the next few years.
Tina Rucci, director of public policy at disability advocacy organization The ARC Minnesota, said this situation creates additional barriers for people with disabilities and others who rely on Medicaid for healthcare access. She pointed out that it places extra responsibilities on counties, which will need to verify all eligibility information and manage double the paperwork.
She is urging Minnesota lawmakers to collaborate to mitigate the potential negative impacts of the legislation on Medicaid beneficiaries, and she noted that states are required to inform Medicaid enrollees between June 30 and August 31, 2026, about what the new work reporting requirements will entail.
“We have to trickle that down into the community, and that takes time,” Rucci said. “So, the clock is ticking, and we just want to make sure that we have time for people to understand all of these intricacies before they might accidentally miss the exemption period and fall off their coverage.”
‘Where do we start?’
The Minnesota Department of Human Services analyzed the Medicaid provisions in the 2025 tax and spending bill and found that work-reporting requirements create high costs for taxpayers to ensure that only a small number of people are employed. They estimate that this will lead to a $200 million loss in federal funding each year due to fewer people having coverage, along with a possible $165 million increase in administrative costs for the state, counties, and Tribal entities.
Rep. Danny Nadeau, R-Rogers, introduced a bill Tuesday aimed at helping Minnesota comply with federal Medicaid work requirement regulations. But action on the bill was postponed.
No one testified either in favor of or against the bill, according to the House of Representatives, “but social service organizations submitted letters expressing” their opposition. Many of these letters highlighted concerns that the bill would deny essential health coverage to low-income individuals, as it appears to go beyond what is required by federal mandates.
In an interview with MPR News last month, Nadeau said the new work requirements allow the state to create a better system for verifying Medicaid eligibility. He added that agencies are working on this, but Nadeau thinks the Legislature should be more involved too.
“One of the requirements is you can volunteer for 80 hours a month. Well, we don't have a way to capture that,” Nadeau said. “The proof of that. So, there's a lot of unknowns right now.”
Rep. Mohamud Noor, DFL-Minneapolis, said the state cannot ignore the numerous changes that need to be addressed.
“The implementation risks are too high for us not to be able to do things quickly and to be able to have all hands-on deck from the counties to the state,” Noor said. “If we don't do that, we will end up creating a lot of backlogs, and too many people may lose their coverage.”
Noor added that safeguards must be put in place so people can continue to maintain their health insurance coverage and do not face wrongful denials.
“I don't think any of this can wait. So, the question is, where do we start?” Noor asked. “And how we can make sure that we protect services for the most vulnerable Minnesotans.”