Medicaid Work Requirements: Does Addiction or Mental Health Treatment Exempt You?

New Medicaid work requirements start by January 1, 2027, and some states began early. Here's who has to report 80 hours a month, how the exemptions for addiction treatment, substance use disorders and mental health conditions work, and what to do if you get a notice.

A new federal law requires many adults on Medicaid to show that they work, volunteer or go to school to keep their coverage. Most states must start by January 1, 2027, and a few have started already.

If you are in addiction treatment, live with a substance use disorder or have a serious mental health condition, you may be exempt. But in many states, being exempt is not automatic. You may need to answer a notice or ask your provider for paperwork. This guide explains who the rules apply to, how the exemptions work and what you can do now to protect your coverage.

This article was last reviewed on October 14, 2026. The rules are new and still changing, so check with your state Medicaid agency for the latest details.

If you or someone you love is in danger right now, call or text 988, or call 911.

Who the work requirements apply to

The requirements come from the 2025 federal budget law, once called the "One Big Beautiful Bill," which was signed on July 4, 2025. According to KFF, they apply to adults in the Affordable Care Act Medicaid expansion group and to some people covered through state waiver programs.

In general, the rules apply to you if all of these are true:

You are 19 to 64 years old
You get Medicaid through your state's Medicaid expansion, which usually covers adults with incomes up to 138% of the federal poverty level
You don't qualify for an exemption

That adds up to about 20 million people in 40 states and Washington, DC, plus some adults in Georgia and Wisconsin, which cover adults through waivers.

The rules do not apply to children, to people who get Medicare, or to most people who qualify for Medicaid because of a disability, pregnancy or another group outside the expansion. They also don't apply in states that never expanded Medicaid. See the state-by-state section below.

What you have to show

Under the law, as summarized by State Health and Value Strategies, you meet the requirement in a month if you do any of these:

Work at least 80 hours
Volunteer (community service) at least 80 hours
Take part in a work program at least 80 hours
Go to school at least half-time, including college or a career or technical program
Combine work, volunteering and a work program to reach 80 hours
Earn at least $580 a month, which equals 80 hours at the federal minimum wage. Seasonal workers can use their average monthly income over six months.

When your state checks

States check at two points:

When you apply. States look back at least one month before you apply, and can look back as far as three months.
At renewal, every six months. Expansion adults now renew every six months instead of once a year. States must check at least one month since your last renewal, and some will check every month.

States are supposed to check automatically first, using data they already have, such as wage records and Medicaid claims. If they can't confirm that you meet the rules or are exempt, the Centers for Medicare & Medicaid Services (CMS) says they must send you a notice and give you 30 calendar days to respond.

If you don't respond in time, your application can be denied or your coverage can end. You have the right to a fair hearing, and you can reapply at any time. One important catch: people who lose Medicaid for not meeting the work requirement can't get subsidized Marketplace coverage instead.

Exemptions for addiction and mental health

The law exempts several groups that matter for people in treatment. According to CMS and State Health and Value Strategies, you are exempt if you are:

In a drug or alcohol treatment program

People "participating in a drug addiction or alcohol treatment and rehabilitation program" are exempt. According to Behavioral Health Business, the federal rule clarifies that people actively in drug or alcohol treatment, rehabilitation or recovery are covered.

This can include programs such as residential treatment, a partial hospitalization program (PHP), an intensive outpatient program (IOP), outpatient counseling and medication-assisted treatment (MAT). Each state decides exactly which programs count and how long the exemption lasts, so ask your state.

Medically frail

People who are "medically frail" are exempt. Under the law, this includes people who:

Have a substance use disorder
Have a disabling mental disorder
Are blind or disabled
Have a physical, intellectual or developmental disability that significantly limits daily activities
Have a serious or complex medical condition

The federal rule issued in June 2026 adds a test: the condition must impair your ability to meet the work requirement. States can use screening tools, and some may let you self-attest, meaning you state it yourself on a form, according to Behavioral Health Business. Advocates expect definitions to vary from state to state.

Other exemptions that often apply

You are also exempt if you are:

A parent, guardian or caregiver of a child 13 or younger, or of a person with a disability
Pregnant or getting postpartum coverage
American Indian or Alaska Native
A veteran with a total disability rating
A former foster youth under 26
Meeting the work rules for TANF, or in a household that gets SNAP and isn't exempt from SNAP work rules
Recently released from jail or prison, within the past three months

Short-term hardship months

States can also choose to excuse a month for a short-term hardship. State Health and Value Strategies lists these options:

A stay in a hospital, nursing facility or inpatient psychiatric hospital, or care of similar intensity
Living in an area with a federally declared disaster
Living in an area with high unemployment
Traveling for an extended time to get care for a serious or complex condition

Hardship months usually must be requested. If you were in the hospital or in inpatient psychiatric care, tell your state Medicaid agency.

A note on privacy

Records from substance use treatment programs have extra privacy protection under a federal rule called 42 CFR Part 2. Providers have asked CMS to make clear that those protections still apply when treatment information is used to confirm an exemption.

You decide what to share. Some states use a simple form instead of full records. Nebraska, for example, asks people to fill out a self-declaration form when it can't confirm an exemption from its own data. Ask your provider what they can send and who will see it.

What to do now

Make sure your state has your current address, phone number and email. Notices are sent by mail and at least one other way, such as text or email. A missed notice is one of the most common reasons people lose coverage.
Open every letter from Medicaid. Respond within 30 days. If you think you are exempt, say so and explain why.
Ask your treatment provider about documentation. Ask whether they can give you a letter or form that shows you are in treatment or have a qualifying diagnosis, in case your state asks.
Keep records of work and volunteering. Pay stubs, timesheets and volunteer logs can help if the state can't confirm your hours automatically.
Report inpatient stays. If you spent time in a hospital or psychiatric unit, ask whether that month counts as a hardship month.
Ask for help. Your state Medicaid agency, your health plan's member services line and your treatment program's case manager can all help. You can also call 211 for local help.

If you lose coverage, you can reapply. Many treatment programs also offer sliding-scale fees or state-funded slots. Our guide to whether insurance covers rehab explains other ways to pay.

Where each state stands

Here is where states stood as of October 14, 2026, based on the KFF work requirements tracker, Newsweek and state agencies. Dates can change, and some governors have asked for more time. Healthinsurance.org notes that states making a good-faith effort may be able to delay, but it's not clear whether any delays will be granted.

States that started early

Nebraska began enforcing work requirements on May 1, 2026, the first state to do so. It checks existing data first and then asks people to fill out a self-declaration form, according to the Nebraska Department of Health and Human Services.
Montana began work requirements on July 1, 2026.
Arkansas began a soft launch in July 2026. No one will lose coverage for not meeting the rules before January 1, 2027.
Iowa starts December 1, 2026 for new applicants. Most current members will face the rules at renewals starting in February 2027.

Waiver states

Georgia already requires work for its Pathways to Coverage program. Its waiver ends December 31, 2026, and the federal rules apply from January 1, 2027.
Wisconsin covers some adults through a waiver, and the requirement applies to them starting in 2027.
Tennessee has not expanded Medicaid, so the rule reaches only a small number of adults covered through its waiver.

States starting January 1, 2027

Adults in the Medicaid expansion group must meet the rules starting January 1, 2027, in Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Virginia, Washington, West Virginia and Washington, DC.

States where the rule does not apply

Alabama, Florida, Kansas, Mississippi, South Carolina, Texas and Wyoming have not expanded Medicaid, so the federal work requirement does not apply there.

Find treatment that takes Medicaid

Waypoint lists addiction and mental health providers in every state, and many accept Medicaid. You can search providers near you or start from your state's page. Searching is free, and we never ask about your health.

Frequently asked questions

Will I lose Medicaid if I'm in rehab?

Not for the work requirement, as long as your state knows you are in treatment. People in drug or alcohol treatment programs are exempt. If you get a notice, respond within 30 days and ask your program for documentation.

Does a mental health diagnosis exempt me from Medicaid work requirements?

It can. People with a disabling mental disorder count as medically frail and are exempt. Under the federal rule, the condition must impair your ability to meet the requirement. Each state decides how to confirm this, often with a form or a screening.

Is a substance use disorder an exemption even if I'm not in treatment right now?

The law lists people with a substance use disorder as medically frail, which is a separate exemption from being in a treatment program. How states confirm a substance use disorder will vary, so check with your state.

Does medication-assisted treatment count as a treatment program?

MAT is a form of addiction treatment, but each state sets its own definition of a treatment program. If you take buprenorphine, methadone or naltrexone as part of a treatment program, ask your prescriber or clinic how they will document it.

How many hours do I need to work to keep Medicaid?

80 hours a month of work, volunteering, a work program or a mix of these. You can also meet the rule by going to school at least half-time or by earning at least $580 a month.

When do Medicaid work requirements start?

Most states must start by January 1, 2027. Nebraska and Montana have already started, Arkansas has a soft launch, and Iowa starts December 1, 2026.

What happens if I miss the 30-day deadline?

Your application can be denied or your coverage can end. You can ask for a fair hearing, and you can reapply at any time.

This article is general information, not legal advice. Rules vary by state and may change. If you or someone you know is in crisis, call or text 988 to reach the 988 Suicide & Crisis Lifeline, or call 911.