While some people, such as those who are medically frail, are required to be exempt from Medicaid work and community engagement requirements that are set to kick in in all states on Jan. 1, the One Big Beautiful Bill Act of 2025 (OBBBA) also gives states the option to create certain “short-term hardship exemptions.”
Now is the time for physicians and medical associations to work with their state lawmakers and Medicaid officials to ensure that these short-term hardship exemptions are put in place when the work requirements take effect and Medicaid enrollees are required to engage in 80 hours of work per month, part-time education or community service, advises an AMA issue brief (PDF).
“States will decide which optional exemptions to offer and, for medical care-related hardship exemptions, how to define these exemptions and the process for requesting and verifying an exemption. Ensuring that all exemptions are offered and that eligible individuals can successfully receive these will be crucial to safeguarding Medicaid coverage for eligible people,” says the AMA issue brief, “Short-Term Hardship Exemptions from Medicaid Work Requirements.”
The issue brief outlines what exemptions states are allowed to implement and explains how medical associations can get involved now to make sure Medicaid enrollees in their states can receive these exemptions.
The OBBBA requires the Centers for Medicare & Medicaid Services (CMS) to release an interim final rule no later than June 1, and states must implement work and community engagement requirements by Jan. 1, 2027.
The AMA will update the short-term hardship exemption issue brief (PDF) as federal guidance and rulemaking evolves.
Who can qualify for short-term hardship exemptions
The OBBBA outlines some parameters for who may qualify for a short-term exemption from Medicaid work requirements and the circumstances that would allow a person to seek an exemption.
The bill allows states to make short-term hardships available for those who:
- Receive inpatient hospital services, nursing facility services, services in an intermediate care facility for individuals with intellectual disabilities, inpatient psychiatric hospital services or such other services of similar acuity—including outpatient care relating to these services—as the Dept. of Health and Human Services (HHS) secretary determines appropriate.
- Must travel outside of their community for an extended period of time to receive medical services for themselves or their dependent that are necessary to treat a serious or complex medical condition that are not available where they live.
- Reside in a county or equivalent unit of local government where the President of the United States has declared an emergency or disaster.
- Live in a county or equivalent unit of local government that has an unemployment rate that is above 8%; or the state can request that HHS make an exemption if the rate is below 8%, but is 1.5 times higher than the national unemployment rate.
Eligibility for each of these exemptions is determined on a monthly basis. In the case of the first two exemptions above (relating to receiving or traveling for certain medical care), patients must affirmatively request an exemption for any month in which they meet the eligibility criteria.
5 things medical societies can do
The AMA issue brief says that state medical associations and national medical specialty societies should consider these five advocacy opportunities as they engage with their state leaders:
Encourage your state to take up all short-term hardship exemption options. Medical association leaders should communicate clearly to their state Medicaid agencies and legislators that all of the optional short-term hardship exemptions are essential to preventing coverage disruptions and helping patients facing challenging circumstances to successfully apply for or maintain their health coverage.
Help establish clinically grounded definitions. CMS guidance hasn’t been issued yet, but the agency will likely set certain parameters around the exemptions and allow states some flexibility to define key aspects of the exemptions related to hospital or other facility stays, or for traveling for care.
Without physician input, the definitions risk being drawn too narrowly, potentially excluding vulnerable patients. Medical associations should work with states to determine which services—including related outpatient care— of “similar acuity” to the inpatient services specified in the OBBBA should be considered for the medical care exemption and what constitutes a minimum threshold for travel hardship exemptions, such as distance, frequency and necessity.
Advocate streamlined exemption request processes. Advocates should request that processes be embedded in existing workflows, including applications, renewal forms and all other modalities where individuals report changes in circumstances mid-coverage year. There should be plain-language screening questions and easy to understand examples and definitions so that individuals can self-identify. States, among other things, also should work with hospitals to ensure processes for presumptive eligibility determinations screen for the inpatient hardship exemptions.
Oppose unnecessary documentation requirements for patients and physicians. Medical associations should advocate that data matching—such as use of Medicaid claims or encounter data to identify patients who are eligible for exemptions—be used as the primary verification tool for short-term hardship exemptions when an enrollee requests an exemption. When data are not available, states should build processes that are as streamlined as possible.
Medical associations should advocate that individuals not be required to ask for clinician certifications, which would add hurdles for patients and add administrative burdens for physicians. Instead, simple, standardized self-attestation forms should be available when a hardship exemption can’t be verified using existing data sources.
Engage on exemption renewals and transitions. Medical associations should work with state Medicaid agencies to define reasonable renewal standards for short-term hardships that reflect patterns of care, including recovery timelines and ongoing post-acute care.
They also can advise on when individuals should transition from a short-term hardship exemption to a medical frailty exemption to prevent unnecessary coverage churn. Associations should encourage Medicaid agencies to use inpatient and high-acuity claims data via Medicaid Management Information Systems and Health Information Exchanges, to the extent applicable.
Concerns about the medical frailty exemption
The AMA also is keeping an eye on reports that the Trump administration is considering more narrowly defining the “medical frailty” exemption, possibly by tying the exemption to a patient’s inability to work due to a medical condition and by not allowing states to accept self-attestation to verify eligibility, even in the early phases of the rule being implemented.
In a May letter to CMS Administrator Mehmet C. Oz, MD, AMA CEO and Executive Vice President John Whyte, MD, MPH, shared concerns about the unconfirmed reports. The AMA believes an overly narrow “medical frailty” definition will result in otherwise eligible patients losing coverage because of a medical condition that prevents them from complying with community engagement requirements. And, without the ability for patients to self-attest within reasonable limitations, it will be all the more difficult for patients to demonstrate their eligibility for an exemption, meaning more patients will lose coverage for procedural reasons.
“The AMA urges CMS to follow the approach it has been preparing states and stakeholders for over the last several months and to refrain from making the ‘medical frailty’ exemption overly narrow and unduly restricting the ability of states to rely on self-attestation, especially during the early phases of implementation,” Dr. Whyte wrote.
Physicians can learn more about medical frailty exemptions to the Medicare work requirements in a separate AMA issue brief (PDF). The AMA also sent a letter to CMS (PDF) in March offering recommendations for federal implementation of Medicaid work requirements. AMA policy opposes work requirements as a criterion for Medicaid eligibility.
