Medicaid 2025: Major Changes to Work Requirements, Eligibility & Funding Cuts

Medicaid, the U.S. government’s health insurance program for low-income individuals, underwent significant changes in 2025. With new 80-hour/month work requirements, mandatory 6-month eligibility reviews, and federal funding cuts to Medicaid expansion, millions of Americans are affected.  

This article provides a detailed breakdown of these changes, who qualifies for Medicaid in 2025, and how these updates impact individuals, families, and communities. Whether you’re a current Medicaid recipient, an employer, or a healthcare advocate, understanding these shifts is crucial.  

For businesses navigating employee benefits in this evolving landscape, Medcore Brokerage, Texas’s leading employee benefits consultant, offers expert guidance to ensure compliance and optimal coverage for your workforce.

What Is Medicaid?  

Medicaid is a joint federal and state program that provides health coverage to eligible low-income individuals, including:  

• Children  
• Pregnant women  
• Elderly adults  
• People with disabilities  
• Low-income adults (in expansion states)  

As of July 2025, Medicaid covers over 92 million Americans, making it the largest public health insurance program in the U.S.  

How Medicaid Works  

Federal Government: Sets broad guidelines and provides funding.  

State Governments: Administer the program and can adjust eligibility and benefits within federal limits.  

Expansion States: 40 states (plus D.C.) have adopted Medicaid expansion under the Affordable Care Act (ACA), extending coverage to adults earning up to 138% of the Federal Poverty Level (FPL).  

Key Medicaid Changes in July 2025  

The 2025 updates introduce stricter requirements and reduced funding, affecting enrollment and retention.  

1. New 80-Hour Monthly Work Requirement  

Who It Affects:  

• Able-bodied adults aged 18–64  
• Non-disabled, non-pregnant individuals without dependents (varies by state)  

Key Details:  

• 80 hours per month (approx. 20 hours/week) of:  
• Employment (full-time or part-time)  
• Job training programs  
• Community service  
• Vocational education  

Exemptions Include:  

• Pregnant women  
• Full-time students  
• Individuals with disabilities  
• Primary caregivers of dependents  

Impact:  

• An estimated 4.7 million enrollees could lose coverage if they fail to meet requirements.  
• States must track compliance, leading to increased administrative costs.  

2. Mandatory 6-Month Eligibility Reviews  

Previously, Medicaid eligibility was reviewed annually. Now:  

• Recipients must verify income and employment status every 6 months.  
• Failure to submit documentation within 30 days results in automatic disenrollment.  

Why This Matters:  

• More frequent paperwork increases the risk of losing coverage due to missed deadlines.  
• Higher administrative burden on state Medicaid offices.  

3. Federal Funding Cuts to Medicaid Expansion  

The 2025 federal budget reduces Medicaid expansion funding by 10%, leading to:  

• Lower reimbursement rates for healthcare providers.  
• Fewer enrollment slots in expansion states.  
• Potential benefit reductions (e.g., dental, vision, non-emergency transportation).  

Projected Impact:  

• 1.2 million fewer enrollees by 2026.  
• Increased financial strain on safety-net hospitals due to higher uncompensated care costs.  

Who Qualifies for Medicaid in 2025?

Eligibility varies by state but generally includes:

Note: Some states have stricter income limits for non-expansion populations.

What These Changes Mean for You  

For Individuals on Medicaid  

• Track work hours carefully using state-provided logs.  
• Mark 6-month review deadlines to avoid losing coverage.  
• Explore alternatives (ACA Marketplace, employer plans) if no longer eligible.  

For Families  

• Children’s coverage remains stable (CHIP unaffected by work rules).  
• Parents may need to transition to employer-sponsored plans if they exceed income limits.  

For Employers  

• More employees may seek workplace benefits if they lose Medicaid.  
• Compliance updates are needed for HR teams managing benefits.  

For Communities  

• Hospitals may see more uninsured patients, increasing financial strain.  
• Local health departments are expanding enrollment assistance to help residents comply with new rules.  

Choose Medcore Brokerage Employee Benefits Consultant?

Medcore Brokerage stands out as the best employee benefits consultant in Texas, delivering customized health coverage solutions tailored to your business needs.

With deep industry expertise and a client-first approach, we guide employers in building effective benefits strategies, ensuring compliance, and optimizing costs, all while supporting employee satisfaction and retention.   

Expert Editorial Comment 

The 2025 Medicaid changes bring both challenges and opportunities. Staying informed and proactive is key to maintaining coverage. For businesses, partnering with an expert like Medcore Brokerage ensures smooth transitions and compliant benefits strategies.  

Need help navigating Medicaid changes? Reach out to Medcore Brokerage today for expert employee benefits consulting in Texas.  

Frequently Asked Questions

Do all states have the 80-hour work requirement for Medicaid?

No, only 32 states have implemented this requirement as of July 2025. Check your state’s Medicaid website for details.

What happens if I don’t meet the work requirement?

You may lose Medicaid coverage, but you could qualify for special enrollment in ACA Marketplace plans or employer insurance.

Are seniors and disabled individuals exempt from work rules?

Yes, people over 65 and those with disabilities don’t need to meet work requirements.

How do I prove my work hours for Medicaid?

Most states accept pay stubs, employer verification forms, or timesheets. Some have online submission portals.

Where can I get help with Medicaid enrollment?

Contact your state Medicaid office, local health department, or benefits experts like Medcore Brokerage.