On June 1, 2026, the Centers for Medicare and Medicaid Services (CMS) released an Interim Final Rule (IFR) interpreting the new Medicaid work requirement provisions required under last year’s budget reconciliation bill, also known as HR 1 or the One Big Beautiful Bill Act (OBBBA). As noted in our June 4, 2026 issue, the IFR is a significant departure from the previous understanding of the work requirements exemption in HR 1 for people who are medical frail or have significant health needs. The IFR is more restrictive than previously expected because it adds a requirement that, in order for an individual to qualify as medically frail or having special medical needs, the individual must have a condition that “significantly impairs [their] ability to comply” with the new work requirements. This interpretation, if implemented, would bar many people with chronic illnesses and other serious or complex conditions from accessing the exemption, threatening their access to health coverage, and putting their health at risk.
The addition of the significant impairment requirement—which is not present in HR 1 itself—seems to directly contradict many statements made by members of Congress as they drafted HR 1. These comments, some of which are highlighted below, emphasized that work requirements will not prevent those with heightened medical needs from accessing the care they need.
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