The Centers for Medicare & Medicaid Services said Friday that states may use an optional hold-harmless period through June 30, 2027, under which they would still check new Medicaid work rules but would not deny applications or drop otherwise eligible people solely for failing those rules^1,2,4.

CMS said certain applicants and beneficiaries ages 19 to 64 must meet a statutory work requirement beginning Jan. 1, 2027, unless they are excluded¹. NBC News reported that the requirement still starts on Jan. 1 and that states that opt in will not be held accountable for cutting coverage for noncompliance until at least July 1².

The work rules were enacted in 2025 legislation and detailed in a June 2026 CMS interim final rule^2,4. Qualifying activities include 80 hours a month of work, community service or a work program, at least half-time school, a mix totaling 80 hours, or meeting an income threshold, CMS said^1,4.

Dan Brillman, who directs Medicaid and CHIP at CMS, said states had made progress and had described what it takes to implement the rules at scale^1,2,3. The White House declined to comment, NBC News reported².

NBC News said the Congressional Budget Office estimated the work requirements alone would leave 5.3 million more people uninsured by 2034². Fierce Healthcare cited separate estimates that 5 million to 10 million people could lose Medicaid coverage in 2028⁴.

Pressure for more time had been building, NBC News and Axios reported^2,3. Five Democratic governors asked Health Secretary Robert F. Kennedy Jr. last month to postpone the start, NBC News said². Axios said a federal court last month struck down a portion of the rules on proving that chronic illness impairs the ability to work³. Fierce Healthcare said a Massachusetts judge rejected the administration's medical-frailty definition in October after 26 states sued⁴.

Nebraska started work rules in May, and more than 1,000 people lost coverage or were denied benefits through August, NBC News reported, citing state figures². Axios said the main worry among hospitals is reporting mix-ups, not people refusing to work³.

Sarah Lueck of the Center on Budget and Policy Priorities said the announcement lets states delay harm, NBC News reported². Axios said Democrats who will control Congress next year intend to push for further delays or to scrap the work requirements³.

CMS said the pause is optional and urged states to use existing data to verify work or exclusions before asking people for paperwork^1,4. It is not yet public which states will opt in^1,2.