States Say They Cannot Build Medicaid Work-Rule Systems by December. Millions Could Lose Coverage in the Rush.

States have been ordered to enforce new Medicaid work requirements by December, but many say they do not have the staff, technology, or funding to do it safely. The danger is not merely bureaucratic delay. It is that eligible people could lose health coverage because a state system cannot process their paperwork in time.

The rule change is national. The infrastructure failure will be local - in call centers, eligibility systems, and county offices already struggling with staff shortages.

The December Deadline States Say They Cannot Meet

Under the One Big Beautiful Bill Act signed July 4, 2025, Medicaid expansion enrollees must demonstrate 80 hours per month of work, school, or community service starting in 2027. States are responsible for building the eligibility tracking infrastructure and for notifying every affected enrollee by December 31, 2026. North Carolina’s Medicaid administrators estimated they would need an additional $31.2 million per year to conduct the required eligibility checks - funding that state lawmakers did not provide.

North Carolina’s Medicaid program was already facing a shortfall entering the current fiscal year. Lawmakers approved $600 million toward a requested $819 million - and the additional federal work requirement costs come on top of that gap. Kevin Leonard, executive director of the North Carolina Association of County Commissioners, called the mandate “one of the most significant unfunded mandates and one of the largest shifts of administrative and economic responsibility that our state and our counties have seen in generations,” as reported by WRAL.

How Paperwork Becomes a Coverage Loss

WRAL reported on the North Carolina legislative hearings in January 2026 with direct quotes from county commissioners and state Medicaid officials. The AARP timeline of SNAP and Medicaid changes documents the December 31 and August 31 notification deadlines, with citations to the original legislation and state guidance. Pennsylvania’s Department of Human Services has published a public-facing explainer confirming the notification rules and the 2027 work requirement start date.

The Staffing and Technology Gap

States that cannot execute the December 31 notification requirement risk leaving eligible enrollees uninformed - leading to benefit terminations among people who would have qualified if they understood the work requirement and how to document it. KFF has noted that states are still awaiting federal guidance on multiple aspects of implementation and that variation in state administrative capacity is likely to produce uneven outcomes. The deadline is 24 weeks away.

References: WRAL | AARP | Pennsylvania Department of Human Services