Key Takeaways
- 4.8 million Medi-Cal enrollees are projected to fall into the category that will be subject to work requirements under H.R. 1 starting in 2027. Of these, 2.2 million are anticipated to qualify for an exemption.*
- Exemptions include: parenting a child who is 13 or younger or has a disability; meeting work requirements for other federal programs; and “medical frailty,” which can include having a disability, substance-use disorder, disabling mental disorder, or complex medical condition, among other criteria.
- 1.1 million Medi-Cal enrollees are expected to lose coverage due to the H.R. 1 work requirement* by 2029-30, many simply due to administrative barriers.
In July 2025, President Trump signed H.R. 1. The law reduced federal funding for Medicaid (called Medi-Cal in California), the health insurance program for Americans with low incomes, by $1 trillion over the next decade.
Among other changes to Medicaid rules and policies, it added a new requirement that certain adult enrollees work, attend school, or volunteer to keep their coverage. This requirement takes effect January 1, 2027, in California.
1. Who Is Subject to H.R. 1 Work Requirements?
Working-age (19-64) adult enrollees who are eligible for Medi-Cal under the Affordable Care Act (ACA). As of May 2026, the California Department of Health Care Services (DHCS) estimates that 4.8 million Medi-Cal enrollees are in the category that is subject to the requirement. Of those, 2.2 million are expected to qualify for an exemption, although figures are subject to change. *
2. Of Those Who Are Subject to the Work Requirement, Who Qualifies for an Exemption?
Exemptions include:
- Parents/guardians/caregivers of a dependent child age 14 and younger
- Parents/guardian/caregivers of a disabled person
- Veterans with a disability rating of “total”
- Incarcerated or recently released from a correctional facility within the past 90 days
- Entitled to Medicare Part A or enrolled in Part B
- Meeting Temporary Assistance for Needy Families (called CalWORKs in California) or the Supplemental Nutrition Assistance Program (called CalFresh in California) work requirements
- Participating in drug/alcohol treatment programs
- Medically frail, per the federal statute. This includes persons (1) with a substance-use disorder; (2) with a disabling mental disorder; (3) with a physical, intellectual or developmental disability that significantly impairs their ability to perform one or more activities of daily living; (4) with a serious or complex medical condition; or (5) who are blind or disabled (as defined in section 1614 of the Social Security Act).
See the “Working Reporting Requirements” section of DHCS’ H.R. 1 Implementation Plan for more details. Federal guidance released in June 2026 clarifies how states should implement the work requirement, including definitions and rules around the medical frailty exemption.
3. How Does a Medi-Cal Enrollee Meet the Work Requirement and Keep Their Coverage?
DHCS and county Medi-Cal eligibility systems will try to determine if an enrollee is meeting the requirement (or is exempt) based on medical claims, work, education, or volunteer data that they already have. If they cannot verify compliance or an exemption from available data, then an enrollee must show evidence of work, community service, school, or some combination of all three activities for 80 hours a month at their next renewal date after January 1, 2027. (See DHCS’ H.R. 1 Implementation Plan for more details.)
4. How many Californians are expected to lose Medi-Cal coverage because of the H.R. 1 work requirement?
As of May 2026, DHCS estimates that 1.1 million Medi-Cal enrollees will lose coverage by 2029-30 because of H.R.1 work requirement. *
DHCS is concerned that due to the new work requirement and more frequent Medi-Cal renewals required under H.R. 1, many enrollees will lose coverage simply because of the additional administrative burden. Procedural disenrollments — when someone losses Medi-Cal because of missing paperwork or other administrative reasons rather than a formal determination of ineligibility – are already common. For example, 66% of Medi-Cal enrollees who lost coverage during the COVID-19 “unwinding” were “procedurally disenrolled.”
5. How Much will It Cost California to Implement the H.R. 1 work Requirement?
- $1.5 billion = additional Medicaid costs in FY26-27 due to H.R. 1.
- $9.6 billion (federal and state General Funds) = lost revenue by FY 2029-30 as a result of the H.R.1 work requirement.
6. What Can Medi-Cal Enrollees Do Now to Prepare?
- Make sure your contact information with Medi-Cal is up-to-date.
- Open any mail from Medi-Cal or your county eligibility office right away and respond quickly. They will send you a letter to let you know if you must comply with work requirements, or if other information is needed from you.
- Contact your county Medi-Cal office or the Health Consumer Alliance to get your questions answered.
*These DHCS estimates were made before federal guidance was released to states on June 1 with more details on, among other things, how the medical frailty exemption can be defined and documented. DHCS may revise their estimates in light of this federal guidance, likely decreasing the projected number of Medi-Cal enrollees who will qualify for an exemption, and increasing the number that will lose coverage. DHCS plans to update its overall H.R. 1 Implementation Plan in the summer or early fall of 2026.
