Who risks losing coverage under California’s Medicaid work rules?
By Sirisha Dinavahi
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June 12, 2025 (LAPost.com) — 1.4 million adults in California could lose their Medicaid coverage by late 2026 under a federal proposal advancing in Congress. The plan would require states to impose work-reporting rules on certain recipients, a move that advocates warn may hinder employment among vulnerable populations and increase public health costs.
The House-approved budget bill mandates that non-exempt Medicaid recipients work, volunteer, or attend school for at least 80 hours per month to retain coverage. Urban Institute modeling projects that between 1.2 million and 1.4 million Californians could lose Medi‑Cal coverage as a result.
Proponents see it as a measure to reduce federal spending and encourage workforce participation. House Speaker Mike Johnson said work requirements carry a “moral component” and labeled non-working enrollees as “defrauding the system.” Similar national proposals aim to offset costs associated with reversing the 2017 tax cuts.
Opponents highlight that around two‑thirds of Medicaid recipients in California already work, with another 29% qualifying for exemptions as students, caregivers, or people with disabilities. They say the new documentation requirements may trip up individuals who already meet the criteria.
Katherine Hempstead, senior policy officer at the Robert Wood Johnson Foundation, said the plan might save money “by people inadvertently or accidentally losing their coverage,” adding saving lives through administrative failures is “not a good way to run social insurance.”
Evidence from state programs in Arkansas and New Hampshire supports this view. Although the Arkansas policy dropped 18,000 people in its first six months, employment did not improve. Both states eventually abandoned work mandates amid rising coverage losses.
Urban Institute data show California is projected to experience the nation’s highest coverage losses under the proposal—an estimated 1-1.2 million people.
Loss of coverage could cascade through the economy. The Commonwealth Fund reports that national work‑requirement proposals could cause 4.6 million to 5.2 million individuals to lose Medicaid, cutting $33 billion to $46 billion in federal spending in 2026 and costing hundreds of thousands of jobs. Nationwide, states might face billions in lost tax revenue and economic output.
In California, clinicians warn that patients who delay care may increase demand for emergency treatment, leading to uncompensated care. “They want to make it so hard for you and your family to access care with these onerous work requirements that you say, ‘I’m not even going to bother, I’ll just try not to get sick,’” Rep. Laura Friedman, D‑Los Angeles, said during a press conference this week.
Diana Alfaro, associate executive director at Central City Neighborhood Partners in L.A., noted many recipients in informal roles lack payroll documentation. She said workers such as nannies or gardeners may struggle to provide proof of hours, risking accidental disenrollment.
Similarly, University of California, Berkeley labor policy director Nari Rhee highlighted the risk of coverage loss due to confusion: “Even in New Hampshire, where they thought they were being gentle about the rollout, people had a hard time getting through (phone lines) to ask questions,” Rhee said. “So you can expect a pretty large percentage of people who could meet the requirements just fine, basically falling through the cracks and losing coverage because they just didn’t know or couldn’t get the information they needed.”
Under the bill, work rules would take effect on Dec. 31, 2026, although states could begin implementing them earlier. California Gov. Gavin Newsom also faces a fiscal shortfall. His administration has proposed limits on coverage for undocumented residents and possible freezes in enrollment, citing a $12 billion budget gap.
About 5 million Californians currently qualify for Medi-Cal through the Affordable Care Act’s Medicaid expansion, which since 2010 has allowed states to cover low-income adults without children or disabilities. It’s this specific group that would be targeted under the proposed work requirements.
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