The federal list of exemptions from new Medicaid work requirements does not include homelessness, and clinics that serve unhoused patients are now working out how to document eligibility through other categories before enforcement begins.
The Centers for Medicare and Medicaid Services confirmed to KFF Health News that states must adhere to the federal exemption list. At least four states, Montana, Arizona, Kentucky, and Utah, had previously proposed policies that included homelessness as an exemption. Montana lawmakers had also intended to excuse people fleeing domestic violence and caregivers of hospitalized family members, two more groups the federal list omits. Montana plans to begin removing enrollees who cannot demonstrate compliance in October 2026.
The gap matters because of who fills it. About 746,000 people experienced homelessness in the United States last year, according to Department of Housing and Urban Development data, a figure that has risen 27% since 2013. In 2023, 55% of patients receiving medical or behavioral health services through the roughly 300 Health Care for the Homeless programs nationwide were enrolled in Medicaid.
The Documentation Problem Underneath the Rule
The requirement is 80 hours per month of work, education, job training, or community service, or qualification for an exemption. Compliance is not the same as working. It is proving that you worked.
That distinction falls hardest on people without stable housing. Cassidy Kipp, who heads the Samaritan House shelter in Kalispell, Montana, told KFF Health News that clients often begin with temporary and informal jobs, such as cleaning out a storage unit, that produce no pay stub. Verification systems generally rely on payroll records, tax filings, and employer attestation, none of which capture cash or day labor.
Mail is the second obstacle. Renewal notices, verification requests, and disenrollment warnings are sent to an address. People without a fixed address frequently miss them, and missing a notice is one of the most common paths to losing coverage even when a person remains eligible. Dustin Goss, a case manager at the same shelter, put the problem plainly: it is hard to worry about paperwork when you do not know where you are eating that day.
Kaitlyn Bosshardt, a social worker at Partnership Health Center in Missoula, has seen more people priced out of longtime rentals as housing costs outpace incomes, which means the population needing this documentation is growing. The reporting was published by KFF Health News and NPR.
The Categories Clinics Are Using Instead
Homelessness is not itself an exemption, but many people experiencing homelessness qualify under categories that are on the list, and this is where clinic staff is focusing. The federal exemptions cover people with disabilities, people older than 64, pregnant people, and Native Americans, among others.
The medically frail category is the most commonly cited route for everyone else. Federal statute defines it to include people with a substance use disorder, a disabling mental disorder, or a physical, intellectual, or developmental disability that significantly impairs ability to perform activities of daily living, along with people with serious and complex medical conditions.
None of these is automatic. Anyone without a clear-cut qualification such as age or disability status has to prove they are too sick to work, which usually means clinical documentation, which shifts the burden onto the same safety-net clinics already stretched thin. A patient with untreated mental illness who has never been formally diagnosed does not have a diagnosis code to submit.
Jennifer Tolbert, deputy director of KFF's Program on Medicaid and the Uninsured, said the federal regulations are considerably stricter than many states expected, including states supportive of work requirements. In June, 25 mostly Democratic-led states sued the Trump administration over the rules, arguing the medical frailty standard would be too hard for enrollees to meet and for states to assess. The Congressional Budget Office projects the requirements will increase the number of uninsured Americans by more than 5 million by 2034.
Who Faces the Highest Risk of Losing Coverage
The people most likely to be disenrolled are not those refusing to work. They are people whose circumstances make documentation hardest.
That includes people cycling between shelters, vehicles, and temporary stays; people with untreated or undiagnosed mental illness or substance use disorders; people with episodic health conditions such as seizure disorders, who may be able to work sometimes and not others; and people in rural areas without reliable internet, transportation, or a nearby eligibility office.
Automated verification is meant to catch many of these cases without paperwork, but the systems are not all ready. Montana's health department said its automatic check against existing medical records should be in place by October. Anyone the state does not automatically exempt would have 30 days to prove their case.
Losing Medicaid for this population is not an abstraction. It typically means losing access to medications for chronic conditions, behavioral health treatment, and substance use disorder treatment, which in turn raises emergency department use and uncompensated care costs that hospitals absorb.
MedicalDaily has reported previously on the federal work rule taking legal effect and what states must do next.
What Enrollees and Advocates Should Do Now
If you or someone you assist is enrolled in Medicaid expansion coverage and lacks stable housing, the most useful step is establishing a reliable mailing address. Many shelters, Health Care for the Homeless clinics, and community action agencies accept mail on behalf of clients. Providing that address to the state Medicaid office is what makes every subsequent notice reachable.
Ask a clinician whether any current diagnosis supports a medically frail or disability determination, and ask for that documentation in writing before enforcement begins rather than after a termination notice arrives.
Keep records of any work performed, including informal work. Written statements from the person who paid you, dates, and hours are better than nothing and may be accepted as attestation in some states.
Find out what your state requires and when. Montana, Arkansas, and Nebraska have already begun implementing checks, while most states begin in January 2027. State Medicaid agency websites and legal aid organizations publish the specifics.
If coverage is terminated, request a fair hearing promptly. Deadlines are short, and coverage can sometimes continue during an appeal if requested in time.
Federally qualified health centers, including Health Care for the Homeless programs, serve patients regardless of insurance status and use sliding-scale fees. Roughly 1,400 such centers operate nationwide, though they generally do not provide specialty care, and organizations representing them warn that large coverage losses would strain their finances.
Frequently Asked Questions
Is homelessness an exemption from Medicaid work requirements? No. The federal exemption list does not include homelessness, and CMS has confirmed states must follow the federal list.
Can someone who is homeless still be exempt? Often yes, through other categories such as medically frail status or disability. Federal officials have said many people who are homeless could qualify that way.
What does medically frail mean? Federal statute includes substance use disorder, disabling mental disorder, physical or intellectual or developmental disability affecting daily living, and serious complex medical conditions.
What are the requirements? Eighty hours per month of work, education, job training, or community service, unless an exemption applies and is documented.
When does enforcement start? It varies. Montana, Arkansas, and Nebraska have already begun. Montana plans to remove noncompliant enrollees in October 2026, and most states begin in January 2027.
Why do eligible people lose coverage? Missed notices, unstable mailing addresses, and informal work that generates no pay stub are common causes of procedural disenrollment.
Where can someone get care without Medicaid? Federally qualified health centers and Health Care for the Homeless programs serve patients regardless of insurance status on a sliding-fee scale.
