"The federal government’s new Medicaid work requirements, while intended to promote employment, risk severing a vital lifeline for individuals like Tywon Pugh, who face significant barriers to work due to chronic health conditions and homelessness. The stringent rules, which exclude homelessness as an automatic exemption, could lead to millions losing coverage and facing an uninsured future."
The implementation of new federal regulations mandating work or community engagement activities for Medicaid beneficiaries is poised to create significant challenges for individuals struggling with chronic health conditions, disabilities, and housing insecurity. These stringent requirements, which largely exclude homelessness as a qualifying reason for exemption, are raising alarms among healthcare providers and advocates who fear a surge in uninsured individuals and a disruption of critical medical care. States are now tasked with enforcing these rules, with several, including Montana, Arkansas, and Nebraska, already initiating the process, leaving many enrollees in precarious situations as they strive to maintain their essential health coverage.
Tywon Pugh, a 46-year-old resident of Missoula, Montana, exemplifies the plight of those caught in the crosshairs of these new policies. His life has been significantly impacted by seizures, a condition that has made sustained employment exceptionally difficult. He recounts a past experience where a manager dismissed him as a "liability to the job site" after a seizure, leading to his termination from a fast-food position. For years, Pugh relied on his wife to manage their household finances and rent while he sought employment. However, her passing last year left him without his primary support system, leading to homelessness and a worsening of his alcohol dependence, which in turn has exacerbated his seizure management challenges. "When she died, my whole base was depleted," Pugh stated, underscoring the profound impact of his loss.
Medicaid currently provides essential prescription coverage for Pugh’s seizures. This government-subsidized health insurance would also cover addiction treatment, a program he has attempted to access but is currently on a waiting list for. Pugh’s primary objective is to regain his health sufficiently to return to work, but he harbors significant anxiety about maintaining the Medicaid coverage that is indispensable for his recovery.
Early Embrace of New Rules and Federal Mandates
The federal government finalized regulations in the spring, necessitating that millions of Medicaid recipients demonstrate engagement in work, volunteer activities, or educational pursuits to retain their coverage. States are mandated to begin these verification processes by January. Montana, Arkansas, and Nebraska have proactively begun implementing these new requirements.
The Trump administration’s federal work requirement framework includes specific exemptions for certain populations, such as individuals with disabilities, those over 64, pregnant individuals, and Native Americans. However, for individuals who do not fit these clearly defined categories, proving they are too ill to work becomes a necessary step to maintain their coverage. Crucially, the administration has explicitly stated that homelessness is not considered a medical condition and therefore does not qualify as an automatic exemption from these new requirements. This stance diverges from the intentions of some conservative policymakers and at least four states—Montana, Arizona, Kentucky, and Utah—which had previously proposed policies that would have included homelessness as an exemption.
Federal officials, in communication with KFF Health News, confirmed that states must adhere to the federal government’s established list of exemptions and declined to provide further comment on the record. This directive from the Centers for Medicare & Medicaid Services (CMS) means that states cannot independently add homelessness to their exemption lists. This policy comes at a time when homelessness in the U.S. has seen a significant increase, rising by 27% between 2013 and 2025, according to data from the Department of Housing and Urban Development (HUD). In the past year alone, approximately 746,000 individuals experienced homelessness.
Quantifying the number of Medicaid enrollees who are homeless is challenging, but the data indicates a substantial overlap. In 2023, a significant 55% of patients receiving medical or behavioral health services through Health Care for the Homeless programs were enrolled in Medicaid. These community health centers, numbering around 300 nationwide, provide critical services to underserved populations.
Jennifer Tolbert, deputy director of KFF’s Program on Medicaid and the Uninsured, noted that the federal regulations are considerably more stringent than anticipated by many states, even those supportive of work requirements. "It took everyone by surprise," Tolbert commented. Mehmet Oz, who leads CMS, has promoted these regulations as a "path to prosperity" during a press conference in June, emphasizing the need to encourage work.
However, these regulations have faced significant opposition. In June, 25 states, primarily led by Democrats, filed a lawsuit against the Trump administration, arguing that the medical frailty standard would be exceedingly difficult for enrollees to meet and for states to administer. Projections from the Congressional Budget Office suggest that these work requirements could lead to an increase of over 5 million uninsured people nationwide by 2034.
Montana’s Implementation and Broader State Differences
Most states are slated to begin implementing Medicaid work requirements in January. Montana, however, plans to begin dis-enrolling Medicaid beneficiaries from coverage as early as October if they cannot prove compliance with the work requirement. Pugh expressed his concern: "My Medicaid is still active, but when are they gonna cut that off from me? I can’t get employed. How am I supposed to survive?"
The discrepancies between state and federal exemption lists extend beyond homelessness. Montana’s legislative proposals also included exemptions for individuals fleeing domestic violence and caregivers of hospitalized family members, categories that are absent from the federal exemption list. Republican state Rep. Ed Buttrey, who championed Montana’s first Medicaid work requirement bill in 2019, stated that these individuals, due to various conditions, are unable to meet the requirements.
Federal officials have suggested that many individuals experiencing homelessness might qualify for exemptions under other categories, such as being medically unable to work. However, like many states, Montana’s system for automatically verifying these medical exemptions through existing records is not yet fully operational. A spokesperson for the Montana Department of Public Health and Human Services indicated that this system is expected to be in place by October. Individuals not automatically exempted would then have a 30-day window to provide documentation to prove their eligibility.
A Potential Exemption for Health and Bureaucratic Hurdles
Pugh’s seizures could potentially qualify him for a medical exemption. However, accessing consistent medical care over the past year has been a significant challenge. The anniversary of his wife’s death has recently passed, and his housing situation remains precarious, forcing him to find new outdoor sleeping locations each night. A recent incident while camping resulted in the loss of his wallet, containing crucial documents. The scarcity of addiction treatment centers that accept Medicaid patients has further complicated his situation, forcing him to rely solely on willpower to manage his alcohol dependence. "I’m taking it one day at a time," he stated.
In Kalispell, Montana, about two hours north of Missoula, Dustin Goss, a case manager at Samaritan House, a local homeless shelter, voiced concerns that individuals who genuinely qualify for an exemption might become ensnared in bureaucratic complexities. "You can’t really worry about getting paperwork done when you don’t know where you’re eating today," Goss remarked, highlighting the immediate survival needs that overshadow the administrative burdens.
Cassidy Kipp, director of Samaritan House, noted that once individuals secure shelter and begin to stabilize, they often find employment. However, even then, meeting the new work requirements can be problematic. Clients frequently begin with temporary or informal jobs, such as assisting with storage unit cleanouts, which may not provide formal pay stubs required for verification.
Kaitlyn Bosshardt, a social worker at Partnership Health Center in Missoula, has observed a growing number of individuals being priced out of their long-term rentals due to escalating housing costs that outpace wage growth. This trend is exacerbated by limited availability of affordable housing and rental assistance programs.
Partnership Health Center, like approximately 1,400 other federally funded health centers nationwide, provides care to patients on a sliding scale based on their ability to pay. This means that even individuals who lose Medicaid can still receive medical attention. However, organizations representing these health centers have warned that a substantial loss of Medicaid coverage among their patient base could create significant financial shortfalls. Furthermore, these clinics typically do not offer specialized medical services.
During a visit to the Watershed Navigation Center, a refuge operated by Partnership Health for individuals experiencing homelessness, Pugh was informed by his doctor, Atarah Sidey, that the neurology clinic managing his seizures had dismissed him from their care due to three missed appointments. Dr. Sidey referred Pugh to another neurologist in Missoula and discussed options for addiction treatment. "It’s just that if I don’t make the effort at changing, it ain’t gonna happen and I’m gonna end up found on the side of the road somewhere," Pugh confided to Dr. Sidey. "You got this, though, Tywon," she responded, offering encouragement.
Pugh has since connected with a social worker to assist with maintaining his Medicaid coverage. By late July, he was awaiting an opening at a Missoula addiction treatment center and awaiting responses from two job applications. In challenging moments, Pugh draws strength from the memory of his wife, envisioning her encouraging him to remain calm and hopeful. "I just don’t wanna lose hope in the meantime," he said.
