A new work reporting requirement for adults in Medicaid is one of the most widely publicized provisions in the Trump budget reconciliation bill (H.R. 1) passed last year and accounts for a great deal of the projected coverage loss and cuts to Medicaid. In fact, a new study from the Urban Institute estimates that between 4.9 to 10.1 million people will lose coverage by 2028 as a consequence of this new requirement, as well as more frequent renewals required by the new law.
Given the level of misleading rhetoric about who will be impacted, the rush to implement complex new provisions, and the confusion that is likely to ensue once implementation gets rolling, let’s unpack how the mandate applies to low-income parents. One reason that this is an important issue to highlight is that confusion about the new rules may prevent some low-income parents from applying for Medicaid in the first place – mistakenly believing that they are not eligible if they are caregiving and not working for pay.
The short answer is that the overwhelming majority of parents, but not all, should be exempt. Let’s take a closer look.
Which parents will be affected?
In states that have taken up the Affordable Care Act (ACA) expansion, all parents and caretaker relatives1 earning up to 138% of the federal poverty line are eligible for Medicaid. However, unlike adults covered through this group without dependent children, some parents were already eligible prior to the ACA and fall into a category known in the jargon as “Section 1931 parents”.
While 41 states (including DC) have adopted the ACA expansion, Section 1931 parents are a mandatory coverage group that all states must cover. The income eligibility level varies by state and is linked to a state’s income eligibility in 1988 (yes, 1988–this is not a typo) for cash assistance. For example, in Nebraska – a state that is planning to be an early implementer of work reporting requirements – parents with incomes below 58% of the poverty line are covered through the 1931 category. For a family of three, that’s an income below around $15,500 annually or $1,300 per month. Here is a table of Section 1931 parent eligibility levels in each state.
- All parents with income below a state’s “Section 1931” mandatory income eligibility level are exempt regardless of the age of their children.2
H.R. 1 exempts all parents and caretaker relatives with dependent children under age 14 from work reporting requirements. But mandatory Section 1931 parents with children of any age are also exempt. That nuance is at risk of getting lost – and is worth repeating:
- All parents and caretaker relatives with children under 14 are exempt regardless of their income and regardless of their category.
Additionally, some parents or caregivers, regardless of income or the age of their child, are exempt if they are caring for a child or family member with a disability. H.R. 1 and CMS guidance rely on a broad definition of caregiver from the RAISE Family Caregiver Act. The person would be exempt if they are caring for a child, adult child, parent, or spouse with a disability or functional limitation, and providing a range of assistance with activities of daily living, such as managing medications, transportation, or physical assistance.
What do we know so far about how Nebraska and Montana (the early adopters) are doing with respect to parents?
- Nebraska – Despite planning to launch work reporting requirements in May 2026, there is nothing on the state’s website to explain the distinction with mandatory 1931 parents – i.e. that all are exempt. It should be very clear, through notices to enrollees and on the website, that parents or caretaker relatives are exempt if their income is below 58 percent of the federal poverty line (about $12,000 annually for a family of two or $15,500 annually for a family of three).
- Montana – very little information is available yet – the state plans to launch on July 1st so we will keep an eye out. Notices should be forthcoming.
In short, this is just one of the many issues that may cause inappropriate health coverage loss when work reporting requirements are implemented. As we saw with Medicaid unwinding, state choices and political commitment will undoubtedly result in variation across states.
When parents go uninsured, there are a host of negative consequences for their children as well. These include a higher risk of their children becoming uninsured as well as financial risks for the whole family when one member is uninsured. And, of course, a parent whose health needs are going unmet faces greater challenges in meeting the needs of their child. This is just one of the many ways that children will be potentially hurt by the harmful Medicaid policies adopted in H.R. 1.
- Caretaker relative is a relative who has primary responsibility for the care of a dependent child, lives with the child, and is related to the child by blood, adoption, or marriage. ↩︎
- Just to make matters more complicated, states can choose to cover parents who are at higher income levels than mandatory 1931 levels – these parents are “optional” and could potentially be subject to work reporting requirements if they have children 14 or over. A list of these states is forthcoming from CCF. ↩︎
[Editor’s Note: This is the first installment of a blog series on work reporting exemptions for 1931 parents.]