New Federal Requirements Will Go Into Effect in 2027, But Michigan Already Planning for Impacts

A new research report published by the Urban Institute warns that between 171,000 and 355,000 Michiganders could lose their Medicaid coverage under new federal work requirements and eligibility redeterminations established in the Trump Administration's One Big Beautiful Bill Act.

The new requirements will go into effect in 2027 and will require many applicants to show proof they've worked or done other approved activities for 80 hours a month. Redeterminations of whether people are eligible to renew coverage will be required every six months instead of every year.

Who Is Most At Risk

The Urban Institute report identifies several groups that are more at risk of losing Medicaid coverage under the new policies:

  • Individuals who are self-employed
  • Those with health conditions
  • People between 50 and 64 years of age

Matthew Buettgens, a senior fellow with the Urban Institute, explained that even when people meet the work requirements, many will still lose coverage because of difficulty navigating administrative processes for reporting their work activities or exemptions.

"For example, Buettgens said, those who are self-employed could have a hard time verifying their income," Buettgens told Michigan Public.

Administrative Burden

The report estimates that implementing these work requirements will impose an additional $75 million to $155 million per year in costs to institute a reporting program to ensure recipients meet these conditions.

The Urban Institute found that many people who meet the work requirements will still lose coverage because of difficulty navigating administrative processes for reporting their work activities or exemptions.

Buettgens noted that states can mitigate the impacts of these policies by defining exemptions from work requirements more flexibly, and limiting the amount of paperwork applicants need to submit.

The Human Impact

Losing Medicaid coverage can lead to worse health outcomes, financial burdens, barriers to employment, and delays or an inability to receive essential care.

"The benefits of having coverage are pretty broad across a number of areas of life," Buettgens said. "So, interruptions in that coverage could disrupt both health and financial security."

National Impact

The report estimates between 4.9 and 10.1 million fewer people across the country will be enrolled in Medicaid expansion coverage in 2028. These numbers depend on the mitigation scenarios put forward by each state.

High mitigation refers to policy choices that would use automatic data-matching to see if applicants meet the work requirements and eligibility redeterminations. Low mitigation means the state has policies that require more individuals to take direct action and provide the state with documentation of their work hours.

Michigan's Response

As Michigan faces these potential Medicaid coverage losses, state officials are working to understand the full impact and develop mitigation strategies. The DHHS has been meeting with Senate appropriations subcommittees to discuss how the state will handle these new federal requirements in the 2027 budget process.

The report indicates that states with high mitigation policies using automatic data-matching would see fewer people lose coverage compared to states requiring individuals to take more direct action and provide documentation of their work hours.

What This Means for Michiganders

Medicaid is a public health insurance program serving low-income families and individuals and people with disabilities. It's jointly funded by the federal and state governments.

The Urban Institute's analysis shows that Michigan is at risk of losing a significant portion of its Medicaid expansion coverage if it adopts low mitigation policies that place the burden on individuals to navigate complex administrative requirements.

As the 2027 budget process moves forward, Michigan lawmakers and the Whitmer administration will need to balance federal mandates with state-level protections to minimize the impact on vulnerable Michiganders who rely on Medicaid for health coverage.