Issue #2 · April 14, 2026 · Weekly
One in five Americans gets their health coverage through Medicaid. A law passed last year is now dismantling how that coverage works — and the effects are starting to land.
WHAT'S HAPPENING
The biggest Medicaid overhaul in decades is underway.
The One Big Beautiful Bill Act, signed into law in July 2025, made historic cuts to federal Medicaid financing — projected to reduce federal spending on the program by nearly $1 trillion over ten years. Those cuts are now becoming real. Starting January 1, 2026, states lost the enhanced federal match that had incentivized Medicaid expansion under the ACA. By the end of 2026, states must conduct eligibility checks every six months instead of annually. And starting January 2027, most Medicaid recipients will need to prove they're working, in school, or volunteering at least 80 hours a month to keep their coverage. Researchers project somewhere between 5 million and 11.8 million people will eventually lose coverage as a result — the Congressional Budget Office puts the number at 11.8 million by 2034.
POLICY BACKGROUND
What Medicaid is — and why this matters
Created in 1965, Medicaid is the federal-state partnership that provides health coverage to low-income Americans: children, pregnant women, people with disabilities, and since the ACA's 2014 expansion, working-age adults with low incomes. Today it covers roughly 72 million people — about 1 in 5 Americans. The federal government covers between 50% and 90% of costs, depending on the state, and states administer the program within broad federal rules. That federal-state structure is now under enormous strain. The new law restricts states from using "provider taxes" — a key tool states have long used to draw down more federal matching funds — and shifts an unprecedented share of costs to state budgets. States that expanded Medicaid will see their federal allotments shrink, while simultaneously being required to build expensive new administrative systems to verify eligibility every six months and enforce work requirements.
BOTH SIDES
The left says
These cuts will push millions of working people off coverage — people who already work, but who will struggle to document it on a government form every six months. States with underfunded offices can't implement these rules without causing mass wrongful disenrollment. The Arkansas precedent is clear: when work requirements were briefly tried in 2018, 17,000 people lost coverage in three months with no increase in employment.
The right says
Medicaid was designed as a safety net for those who can't work — not a permanent entitlement for able-bodied adults who could be employed. Work requirements create incentives for self-sufficiency and are already standard for other federal programs like SNAP. Cutting fraud and ensuring only eligible recipients receive benefits is basic fiscal responsibility — the program's costs have ballooned and need structural reform.
THREE THINGS TO WATCH
1. The state staffing crisis — New York estimates it needs 80 new employees to handle the administrative load. Pennsylvania has nearly 400 open positions. Missouri has 1,000 fewer front-line workers than a decade ago but more than twice as many enrollees. The rules will hit before most states are staffed to implement them.
2. The courts — Legal challenges are already forming. Advocacy groups argue the cuts violate the federal-state Medicaid compact and that work requirements are not authorized under the Medicaid statute. Courts blocked Arkansas's 2018 work requirement. Similar litigation is likely here — and could slow or alter the rollout significantly.
3. Red-state hospital budgets — Medicaid cuts hit safety-net hospitals hardest. These are often in rural red states where Medicaid is the primary payer. Hospital closures in low-income rural communities may force Republican governors to push back on a law their own party passed.
THE BOTTOM LINE
The debate over Medicaid work requirements has always been, at its core, a debate over what the safety net is for. The politics are shifting: the people most likely to lose coverage aren't welfare stereotypes — they're working parents, students, and caregivers who simply can't navigate a new paperwork burden every six months. How states implement these rules over the next 18 months will determine whether this becomes a policy reform or a coverage catastrophe.
RECOMMENDED READ
An American Sickness — Elisabeth Rosenthal
Rosenthal's journalism has been the clearest guide to how American healthcare got this expensive and this fragile. Her book is essential context for understanding exactly why 72 million people rely on a program that both parties keep fighting over.
→ Find it on Amazon (https://amzn.to/4dEStDo)
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