Disabled workers face Medicaid coverage risks under new work rules

Disabled workers who already have jobs can face a blunt tradeoff: take a raise, a promotion or more hours, and risk crossing a Medicaid income limit that protects the coverage paying for essential care. A May 30, 2025 KFF update found Medicaid is a major source of health coverage for people with disabilities, and many disabled enrollees are not covered through pathways tied specifically to disability or work.

Colorado's Health First Colorado Buy-In Program for Working Adults with Disabilities lets adults with disabilities who work and earn too much for regular Medicaid qualify by paying a monthly premium, with the amount based on gross monthly earned and unearned income after disregards. A 2025 KFF update found similar buy-in programs in some states can let working people with disabilities keep coverage at income levels that often exceed $60,000 a year after earned-income exclusions. New York's Medicaid Buy-In Program for Working People with Disabilities disregards retirement accounts in determining eligibility.

Starting January 1, 2027, some Medicaid enrollees in New York will need to show they are working, going to school, helping out in the community or participating in job training to keep coverage. Virginia's Medicaid guidance requires certain adults in Medicaid expansion to work or do other activities for at least 80 hours a month unless exempt, and coverage will be reviewed every six months. A 2025 KFF tracker shows implementation of the reconciliation law's Medicaid work requirements is underway and points to a January 2027 start date.

The Arc and the National Health Law Program have warned that federal work requirements can function as coverage cuts for disabled people. In 2024, the National Health Law Program said Medicaid work requirements are "quite simply, cuts" and do not actually help people work.