July 31, 2026
Centers for Medicare and Medicaid Services
Attn: Dr. Mehmet Oz, Administrator of the Centers for Medicare and Medicaid Services
Submitted on regulations.gov
CMS–2454–IFC; Docket No. CMS-2026-2047
Re: CMS Interim Final Rule on Medicaid Community Engagement Requirements
On behalf of National Taxpayers Union, the nation’s oldest taxpayer advocacy organization, we write with brief comments on the Centers for Medicare and Medicaid Services’ (CMS) interim final rule implementing the community engagement requirements for certain individuals enrolled in Medicaid. NTU was founded in 1969 to achieve favorable policy outcomes for taxpayers with Congress and the executive branch. Our experts and advocates engage policymakers on important matters affecting taxpayers in a variety of settings, including administrative actions that impact health care spending.
Taxpayers have a compelling interest in policies that can meaningfully bend the long-term cost curve of federal health care programs. The federal government already spends more than $1.8 trillion1 annually on health care, and, from 2024 to 2054, the share of federal noninterest outlays consumed by major health care programs is projected to rise from 28% to 39%.2 In particular, Medicaid has become one of the fastest-growing drivers of federal spending in recent years. Between 20143 and 2024,4 Medicaid expenditures grew by nearly 88%, and today federal and state spending on the entitlement program approaches $1 trillion annually.
The Affordable Care Act’s (ACA) expansion of Medicaid coverage to include able-bodied adults with incomes at or below 138% of the federal poverty level dramatically increased the scale and complexity of the federal entitlement program. By offering states a significantly higher federal matching rate for the expansion population than for traditional beneficiaries, the ACA created a strong incentive for state Medicaid agencies to expand enrollment among able-bodied adults.5 This process has placed additional fiscal pressure on Medicaid while shifting resources away from truly vulnerable beneficiaries, such as low-income children.6
Expanding Medicaid into an open-ended entitlement that makes healthy, working-age adults eligible for government-sponsored health insurance has compounded the program’s longstanding problem with improper payments. Today, Medicaid ranks among the top-five federal programs for improper payments,7 and, in fiscal year 2025 alone, CMS estimated improper payments in Medicaid totaled just over $37 billion, which is a nearly $6 billion increase from the previous year.8
The creation of a community engagement requirement for able-bodied adults comes as a much-needed reform that refocuses Medicaid on its intended mission of being a last-resort lifeline for the truly vulnerable. The community engagement requirement can be satisfied by taking part in just 20 hours per week of work, study, or volunteering and applies only to able-bodied adults between the ages of 19 and 64 who do not have dependent children under 13 or disabled dependents. Traditional enrollees, including seniors, disabled individuals, and pregnant women, face no community engagement mandates whatsoever.
Imposing targeted work requirements will benefit Medicaid and its beneficiaries. As more able-bodied enrollees enter the labor force and obtain employer-sponsored coverage, the Department of Health and Human Services (HHS) estimates work requirements in Medicaid could lift up to 2.9 million people out of poverty.9 The Congressional Budget Office estimates that this policy alone will save taxpayers $326 billion over ten years.10 This bolsters the sustainability of an important safety net by ensuring that limited tax dollars remain focused on the beneficiaries for whom the program was originally intended.
Beyond the fiscal benefits for taxpayers, able-bodied adults enrolled in Medicaid will benefit tremendously from participating in the labor market. An extensive body of research demonstrates that employment is a key factor that shapes an individual’s physical and mental health.11 One study published in the Journal of Epidemiology and Psychiatric Sciences even recommends work as a “critical mental health intervention.”12
These findings are especially relevant for Medicaid enrollees. A study by the Foundation for Government Accountability notes that 62% of able-bodied adults on Medicaid reported no earned income.13 Moreover, survey data show that many unemployed Medicaid recipients dedicate significantly more hours to passive screen time than productive activities like studying or volunteering.14 What makes this detachment from work especially concerning is that it persists in an economy with a subdued labor force participation rate. As of June 2026, this figure stood at 61.5%, which is more than 5% lower than its peak in 2000.15
The success of Medicaid’s community engagement requirements will depend on how thoroughly they are implemented. Past experience with work requirements in other social insurance programs has demonstrated that administrative loopholes and inconsistent enforcement can substantially undermine congressional intent. For example, federal law has long required able-bodied adults without dependents to work, study, or volunteer at least part-time to remain enrolled in the Supplemental Assistance Nutrition Program (SNAP). However, in practice, states have routinely exploited geographic-area waivers to exempt local beneficiaries from these federal mandates.16
Against this backdrop, it is critical that CMS implements Medicaid’s community engagement mandate in a way that appropriately balances the need for maintaining program integrity while protecting access for vulnerable individuals who are genuinely unable to work, volunteer, or study.
This rule’s enforcement provisions ensure Medicaid’s work requirements will not be reduced to a largely symbolic mandate. For example, the medical frailty impairment test represents a thoughtful approach to program integrity. By considering functional limitations rather than just a medical diagnosis alone, this enhanced standard limits opportunities to abuse the medical frailty exemption. Requiring states to build auditable lists of qualifying conditions ensures this standard is thoroughly enforced.
At the same time, the rule also avoids imposing unreasonable administrative burdens on individuals who are already in compliance with the community engagement requirement. For instance, individuals who earn at least $580 per month—the federal minimum wage multiplied by 80 hours—will not be required to present any additional information to prove compliance with the community engagement mandate.
In summary, this rule’s provisions adequately protect the congressional intent behind the enactment of work requirements for able-bodied adults. As such, we urge CMS to finalize this interim final rule. Thank you for your consideration of these comments, and, should you have any questions on this or any other fiscal or regulatory matter before CMS, we are at your service.
Sincerely and respectfully,
Alexander Ciccone
Policy and Government Affairs Manager
National Taxpayers Union
1 https://www.cbo.gov/publication/61951
2 https://www.ntu.org/publications/detail/ntu-comments-on-medicare-and-medicaid-coverage-of-anti-obesity-medications
3 CMS Releases 2014 National Health Expenditures | CMS
5 https://paragoninstitute.org/medicaid/medicaid-financing-reform-stopping-discrimination-against-the-most-vulnerable-and-reducing-bias-favoring-wealthy-states/
6 The Affordable Care Act's Medicaid Expansion Is Shifting Resources away from Low-Income Children | Mercatus Center
7 Payment Integrity: Agencies' Estimated Improper Payments Increased to $186 Billion in Fiscal Year 2025 | U.S. GAO
8 Fiscal Year 2025 Improper Payments Fact Sheet | CMS
9 Medicaid Work Requirements Incentivize Employment and Are Estimated to Reduce Poverty | ASPE
10 A Closer Look at the Work Requirement Provisions in the 2025 Federal Budget Reconciliation Law | KFF
11 Associations Between Employment and Health Outcomes: A Systematic Review of Reviews | Journal of Occupational Rehabilitation | Springer Nature Link
12 Employment is a critical mental health intervention - PubMed
13 754190858-medicaid-work-requirements-paper-6-23-25.pdf
14 How Nondisabled Medicaid Recipients Without Children Spend Their Time | American Enterprise Institute - AEI
15 What is the labor force participation rate in the US? | USAFacts
16 Geographic-Area Waivers Undermine Food Stamp Work Requirements | The Heritage Foundation