CMS Lets States Hold Off on Medicaid Work-Rule Coverage Cuts Through June 2027

The Centers for Medicare & Medicaid Services on Friday, Nov. 13, 2026, gave states an optional “hold harmless” period through June 30, 2027, during which they can check whether people meet the new Medicaid work requirements without denying applications or cutting off otherwise eligible people for failing them.^[1] The requirement itself still starts Jan. 1, 2027.^[1]

Related: Healey files a $2.24 billion supplemental budget for MassHealth and SNAP.

What CMS announced

States that choose the hold-harmless option will still assess whether each person meets the work requirement or qualifies for an exclusion. Until the period ends, they will not deny or disenroll people solely for failing to meet it.^[1] CMS said the transition gives states time to modernize systems, train workers and learn from the first months of the program before enforcement begins.^[1]

“States have made real progress,” said Dan Brillman, CMS deputy administrator and director of the Center for Medicaid and CHIP Services. He said people whose work or exclusion a state can confirm from existing data should not have to hunt down paperwork to prove it.^[1]

The agency also urged states to verify as much as possible automatically, send clear notices explaining what has been confirmed and what is still needed, test their systems end to end and connect people with job, training and volunteer programs.^[1] The option is voluntary, and the announcement did not list which states plan to use it.^[1]

Who the work requirement covers

Starting Jan. 1, certain Medicaid applicants and enrollees ages 19 to 64 must meet the requirement unless they are excluded. Under a CMS rule issued in June 2026, they can qualify with 80 hours a month of work, community service or a work program, at least half-time enrollment in school, a combination of those activities totaling 80 hours, or monthly income above a set threshold.^[1]

The requirement comes from the 2025 federal reconciliation law, which the Trump administration is carrying out through the CMS rule.^[2] The Congressional Budget Office estimated it would save the federal government $326 billion over a decade and leave 5.3 million more people uninsured.^[2]

The Massachusetts court fight

The announcement follows a lawsuit brought by Massachusetts and other states, Commonwealth of Massachusetts v. Oz. On Oct. 29, the U.S. District Court for the District of Massachusetts ruled that CMS lacked the authority to add a test requiring people seeking the “medically frail” exclusion to show that their condition significantly impairs their ability to comply.^[3]

The court struck the challenged language, barred CMS from applying the added test to the plaintiff states and gave those states six months of protection from federal penalties for implementation errors or delays. The ruling did not invalidate the work requirement, the 80-hour standard or the Jan. 1 start date.^[3] On Nov. 3, CMS Administrator Dr. Mehmet Oz said the agency would appeal, calling the definition of medical frailty a question that could reach the Supreme Court.^[3]

What it means for MassHealth

MassHealth covers nearly 2 million people. State officials told WBUR earlier this year that about 360,000 members would be subject to the work requirement or to the new twice-yearly eligibility checks, with exemptions for older adults, people with disabilities and those with young children.^[4]

The state expected at least $30 million in new costs over a year to comply, the bulk of it, about $21 million, for upgraded eligibility computer systems and more call center staff. The federal law is expected to cut federal funding for MassHealth by an estimated $3.5 billion a year once fully in place.^[4]

What happens next

CMS published guidance for states on the hold-harmless period alongside the announcement.^[1] The appeal of the Massachusetts ruling is pending, and states will have to make interim choices about verification, notices and system logic that may later need revising.^[3]

For more coverage, see the Health and Science hub, our report on rising Massachusetts family health premiums and our guide to Health Connector open enrollment for 2027.

Sources

1. Centers for Medicare & Medicaid Services: CMS Announces a Hold Harmless Period to Strengthen Medicaid Work Requirement Systems and Improve Beneficiary Experience
2. KFF: States Sue CMS Over Medicaid Work Requirements Rule, Citing Departure from Earlier Guidance on Medical Frailty
3. Health Management Associates: Medicaid Work Requirements: What the Court Ruling and CMS’s Appeal Mean for Your January 1 Implementation Plan
4. WBUR: Mass. will spend millions to comply with Trump’s health policies

About the reporter: Nora Whitfield is an AI reporter covering Boston and Massachusetts news for The Boston Report. This article was produced with AI under our editorial policy. Read our AI and media disclosure.