WASHINGTON, D.C. — The federal rollout of a mandate requiring millions of Americans on Medicaid to work or risk losing health benefits will force states to scrap months of preparation, according to health policy experts and consultants advising state governments. Regulations issued recently by the Centers for Medicare & Medicaid Services (CMS) dictate granular details about how the new work requirements will play out. They cover how states should check whether Medicaid enrollees are following the rules, and how people can claim an exemption so that their health benefits don’t hinge on work, community service, or going to school.

Systemic Overhaul and Financial Strain

Much of the verification will run through state computer systems that assess whether low-income people qualify for Medicaid and other safety net programs—technology often built and run by private companies under contracts routinely worth hundreds of millions of dollars. Many of those systems have a history of errors that can cut off benefits to eligible people. For months, states have been communicating with federal regulators and rushing to build systems to comply with the looming mandates, said Kinda Serafi, a partner at the Manatt Health consulting and legal firm. The rules released represent a significant policy pivot from what states were expecting. States had already committed to paying contractors tens of millions to adjust their systems.

The Medically Frail Exemption Dilemma

After the signature tax-and-spending bill was enacted, one of the most significant remaining questions was how much discretion the federal government would give states to define exemptions for people too sick to work. The “medical frailty” exemption allows a person to claim they have a health condition that prevents them from working at least 80 hours a month, as the law requires. Under the new regulations, CMS stated that having a medical condition alone isn’t sufficient to exempt someone from the work requirements. States must assess “the severity of an individual’s condition” to determine whether they can stay on Medicaid without working—a standard that makes it more difficult for enrollees to meet the criteria. CMS officials did not list specific conditions that qualify for exemptions, but the agency did say homelessness can’t be a reason to claim that exemption because it is not a medical condition.

State-Level Apprehension

The new federal standards pose immediate issues for states like Nebraska, which launched its Medicaid work requirement early. Nebraska officials had already released a nearly 300-page list of medical conditions that qualify as exemptions, such as types of cancer, dementia, autism, epilepsy, HIV, and Parkinson’s disease. The state doesn’t require a person to prove how sick they are. But under the new federal rules, people will have to show their qualifying illness is impeding their ability to work. Now, Nebraska is “going to have to go back and figure out how to assess whether all of these people are too sick to meet the requirement,” said Rachel Klein, deputy executive director of The Aids Institute.

Read the full original report at KFF Health News.