New CMS Guidance Clarifies How Stricter Medicaid Work Rules Will Be Applied — Disability Advocates Worry About Coverage Losses

# What changed and why it matters Services (CMS) published a 33-page guidance document explaining how states should apply exemptions to new Medicaid community engagement requirements. Those requirements, created by the 2025 One Big Beautiful Bill Act, obligate many Medicaid beneficiaries to show they work, volunteer, or attend school for at least 80 hours per month to remain eligible.

Congress's law includes exemptions for people who are "medically frail" and those with "special medical needs," including people with physical, intellectual or developmental disabilities, plus parents, guardians and family caregivers of people with disabilities. The CMS guidance spells out how states should determine who meets the medical frailty exemption.

# The standard CMS set CMS says people with physical, intellectual or developmental disabilities qualify as medically frail only if their condition "significantly impairs" their ability to perform at least one activity of daily living (ADL). ADLs listed in the guidance include bathing, dressing, walking, toileting, eating and getting in and out of bed or a chair. The guidance reinforces that medical frailty must be tied to an individual's ability to comply with the community engagement requirement.

# How states should verify exemption status

CMS also permits a tiered approach. Under that model, a state could: first check for conditions that inherently qualify for an exemption, then examine a second list of conditions that may indicate medical frailty if backed by additional documentation.

# Concerns raised by disability advocates

Advocates fear the ADL-focused standard and the emphasis on proving inability to comply with work requirements will leave people who have significant support needs but who do not meet the ADL threshold without coverage.

# Practical implications for beneficiaries and states

• Beneficiaries who rely on Medicaid services but do not meet the ADL impairment threshold may need to document additional clinical evidence to qualify for exemption.
• States will likely build processes to review prior-year claims automatically, set up intake for one-time self-declarations, and create systems for annual re-verification.
• The tiered approach gives states flexibility, but differences in how states implement these steps could produce uneven results across the country.

# Context and next steps The new rules must be implemented by many states beginning early next year. The guidance clarifies CMS expectations but stops short of changing the underlying statutory language that created the community engagement requirements and the exemption categories. Disability advocates and some families are already raising concerns that the guidance will not prevent coverage losses for people with disabilities.

An image accompanying the reporting notes a family whose son with mitochondrial disease was told in 2023 he was no longer eligible for Medicaid, illustrating existing risks when eligibility is tightened.