Medicaid work requirements and NEMT: what changes for riders and providers

What the law requires

Public Law 119-21, which became law on July 4, 2025, added a new condition to Medicaid for many working-age adults. Its section 71119, now section 1902(xx) of the Social Security Act, makes them show “community engagement” to enroll or stay enrolled. CMS put the details in an interim final rule (CMS-2454-IFC), published in the Federal Register on June 3, 2026 and effective July 31, 2026.

The requirement applies to what the law calls applicable individuals: adults aged 19 through 64 who are not pregnant, are not entitled to or enrolled in Medicare, and qualify through the adult expansion group or a section 1115 waiver that gives comparable coverage. CMS counts 43 states plus the District of Columbia covering those groups. The territories are not included.

Any one of the following satisfies a month:

States check at application and at renewal. For a new applicant, the state picks a look-back of one to three consecutive months ending just before the application month. For people already enrolled, the state sets how many months between renewals must qualify, and it may choose to check more often than at renewal. States must try their own data first (payroll records and Medicaid claims data, for example) before asking the person for paperwork.

Who is exempt

The law lists groups who never have to show hours, and a few situations where a month counts automatically.

States may also offer short-term hardship months, which a person can claim for:

• A stay in a hospital, nursing facility, psychiatric hospital, or intermediate care facility, or care of similar intensity
• Living in a county under a federal disaster or emergency declaration
• Living in a county with unemployment of at least 8%, or of at least 1.5 times the national rate when that is lower
• Leaving their home area for a long stretch because treatment for a serious or complex condition is only offered elsewhere, for themselves or a dependent

The hospital and travel hardships only apply when the person asks. The travel one sits close to NEMT work. In its rule, CMS says states may start from their existing process for approving NEMT travel expenses (meals, lodging, attendants) when deciding who qualifies.

Six-month renewals

A second change arrives at the same time. Section 71107 of the same law moves expansion adults from yearly eligibility renewals to one every six months. It applies to renewals scheduled from January 1, 2027. American Indians and Alaska Natives are left out of the six-month rule.

The two changes stack. Illinois’s notice to its expansion adults, dated September 1, 2026, says the work requirement begins the first time they renew in 2027 and that renewals will then come every six months, with the requirement checked at each one. More renewals give riders more ways to fall off Medicaid over an unanswered letter, even when they would have qualified. Our entry on Medicaid redetermination explains how renewals work.

Start dates and state choices

The federal deadline is January 1, 2027. States have room on either side of it.

• Early start. A state may begin sooner. Nebraska began enforcing on May 1, 2026, for new applicants and current members in its expansion group, according to its April 1, 2026 provider bulletin. Iowa applies the requirement to people who apply on or after December 1, 2026, and to current members renewing from February 2027.
• Start at renewal. Current members are checked at their renewals, so a January 1 start date reaches them over the following months, or sooner where a state checks between renewals. Illinois told its expansion adults that the requirement starts when they renew in 2027.
• Delay. A state can ask CMS for a good-faith exemption by showing its progress, barriers, and plan. The law caps any exemption at December 31, 2028.
• Design choices. Each state picks the look-back length (one to three months), whether to check between renewals, and whether to offer the hardship months.

Litigation has not stopped the rule. A group of states sued over three parts of it: a work element in the definition of medically frail, a 12-month look-back for frailty, and applying work conditions to the disaster hardship. On July 29, 2026, the federal court in Massachusetts refused to grant the states a preliminary injunction but left them free to file again. It planned full briefing on the merits before January 1, 2027, and allowed the states to renew the request if that schedule slips.

How a rider loses coverage, and their rides

NEMT follows Medicaid. Under 42 CFR 431.53, a state plan must ensure necessary transportation for Medicaid beneficiaries to and from providers, and 42 CFR 440.390 keeps that promise for people in benchmark or benchmark-equivalent plans (see Alternative Benefit Plan). When a person is no longer a beneficiary, the transportation benefit ends too.

The law sets the steps before that happens:

1. The state cannot confirm compliance or an exemption from its own data.
2. It sends a notice of noncompliance explaining how to show compliance or an exemption.
3. The person gets 30 calendar days from receiving the notice. Coverage continues during that time.
4. If nothing changes, the state first checks whether the person qualifies for Medicaid another way. It then denies the application or ends coverage by the close of the following month at the latest, with written notice and a right to a fair hearing.
5. The person can reapply at any time.

For a provider, that timeline means a rider’s trips can keep flowing for weeks after the first letter and then stop. Brokers check eligibility before assigning rides; WellTrans’s Indiana agreement, for example, has the broker confirm eligibility and schedule each trip. In Virginia, MTM Health’s handbook forbids transporting any member unless MTM has issued a unique trip ID for the ride. When coverage ends, new authorizations stop.

What it means for trip volume

Fewer enrolled adults means fewer eligible riders. In its rule, CMS projects a drop in Medicaid enrollment of 2.3 million people for fiscal 2027, which covers only part of a year, and of between 3.1 and 3.3 million people a year from then on. For scale, CMS counts roughly 20 million people in the adult group in fiscal 2025. CMS notes that its estimate does not model how the requirement interacts with the law’s other Medicaid changes.

The effect will not land evenly across your riders:

• Expansion states carry it. The requirement follows the adult expansion group, so a state’s exposure depends on whether it expanded and how many of its riders are expansion adults.
• Many regular riders sit outside it. People who have Medicare, people who qualify for Medicaid through disability, older adults, and children are not applicable individuals. Medically frail adults are exempt, though the state may ask for proof and applies CMS’s impairment test.
• Paperwork counts too. CMS’s own estimate counts people who meet the requirement or an exemption but do not successfully show it, alongside people who do not meet it.

No public source estimates the effect on NEMT trips directly. A practical way to size your own exposure: pull 12 months of trips by payer and program, identify the share that are for adults 19 to 64 in expansion or waiver coverage, and treat that share as the part of your volume that can shrink from 2027. As an example, a fleet running 6,000 broker trips a month, with a fifth of them for expansion adults, has about 1,200 monthly trips that depend on those riders keeping coverage through each renewal.

What providers can do now

1. Know your mix. Size your exposure as above, by payer and state, before January 2027. Our guide to who pays for NEMT maps the payers.
2. Never run a trip without a current authorization. Late cancellations for eligibility will rise around renewal dates. A ride run after coverage ends, without a valid trip ID, may not be paid.
3. Review standing orders often. A rider who loses coverage takes a recurring schedule with them. Check each standing order against the broker’s current trip list every week, and release the vehicle time quickly when rides drop.
4. Point riders to the state. Riders and families will ask drivers and dispatchers about letters. Send them to the state Medicaid agency’s notices and phone line. Illinois, for example, tells members to update their address, watch their mail, and set up an online account.
5. Mention the travel hardship when it fits. A rider who travels a long way for specialty care can ask the state about the travel hardship month, if the state offers it.
6. Have a private-pay price ready. Some riders who lose coverage will still need rides and may ask what it costs to pay directly. Our private pay guide covers setting that rate.
7. Watch 2028 cost sharing. From October 1, 2028, states must charge some cost sharing to expansion adults whose income is over the poverty line, capped at $35 per service and 5% of family income. Each state picks the services, so check whether yours adds a charge to rides.

For current enrollment figures and program trends, see NEMT industry statistics.

Watching the change in HealthRide

HealthRide’s payer summary shows completed trips, cancellations, and revenue for each payer over any period, so a slide in one program’s trip volume shows up early instead of at month end. When a rider’s coverage is in question, pause their recurring series, and end it if coverage stops; ending a series removes its remaining future trips so the vehicle time is free to fill. See the reports.