Medicaid is in the middle of its biggest shakeup in years. Roughly 25 million people lost coverage during a massive nationwide renewal process that wrapped up in 2024, federal lawmakers are pushing new work requirements, and states are navigating funding pressures alongside new rules for children and postpartum coverage. Here’s what’s actually happening and what it means for the people who depend on the program.
The Unwinding: 25 Million People Lost Coverage
During the COVID-19 pandemic, the federal government told states they couldn’t kick anyone off Medicaid. That “continuous enrollment” rule kept people covered even if their income changed or their paperwork lapsed. When that protection ended in spring 2023, every state had to re-check eligibility for its entire Medicaid population, a process known as the unwinding.
Over the next 14 months, approximately 25 million people were disenrolled from Medicaid, roughly one in four of those who had gained or kept coverage under the pandemic-era rules. Some of those people no longer qualified. But the majority lost coverage for purely bureaucratic reasons. As of mid-2024, 69% of disenrollments were procedural: a renewal form sent to an old address, a missed deadline, paperwork that never arrived or was never processed.
The consequences showed up quickly. In California alone, nearly 2 million people were disenrolled, a 13% reduction in the state’s Medicaid rolls and the third-highest disenrollment total behind Texas and New York. Research published in Health Affairs Scholar found that emergency departments in California saw a measurable increase in uninsured patient visits after the unwinding began.
Some states handled the process better than others. Pennsylvania and Indiana invested in updating contact information and improving communication before sending renewal notices, which helped reduce procedural losses. Other states had outdated eligibility systems that couldn’t cross-reference existing government databases to verify someone’s income or address, forcing enrollees to track down and submit documents on their own. In Florida, a lawsuit alleges that confusing and unclear notices led to wrongful coverage denials for tens of thousands of people.
New Federal Rules for Renewals and Children
In response to the chaos of the unwinding, the federal government finalized rules designed to prevent it from happening again. The new regulations simplify the enrollment and renewal process, improve address verification practices, eliminate waiting periods for the Children’s Health Insurance Program (CHIP), and extend streamlined renewal procedures to older adults and people with disabilities.
One of the most significant changes is already in effect for kids. Starting January 1, 2024, all states are required to provide 12 months of continuous eligibility for children under 19 in both Medicaid and CHIP. Previously, this was optional, and some states offered shorter windows or applied it only to certain age groups. Now, once a child is enrolled, they stay covered for a full year regardless of changes in family income or other circumstances. States also can no longer drop a child from CHIP for failure to pay premiums during that 12-month period.
Work Requirements Are Coming
Federal legislation passed in 2025 includes new Medicaid work requirements, marking the first time such mandates have been written directly into federal law rather than granted state by state through waivers. The details of implementation are still taking shape, but several states are already moving forward.
Georgia is currently the only state with an active work requirement waiver in place. Its “Pathways to Coverage” program, implemented in July 2023, requires certain adults to complete 80 hours per month of work, education, or community service to qualify for Medicaid. Georgia’s waiver runs through December 2026, after which the state will need to comply with the new federal framework.
Six other states have pending requests. Arkansas, Montana, Arizona, Iowa, Ohio, and South Carolina have all submitted or are developing waiver proposals that include work requirements. Utah had previously pursued a similar waiver but dropped the effort after the federal mandate passed, since the new law establishes its own requirements directly. The practical impact of these policies is significant: when Arkansas previously implemented work requirements in 2018 (before courts struck them down), more than 18,000 people lost coverage in just a few months, largely because they didn’t understand the reporting process or had trouble navigating the system.
Postpartum Coverage Expanded in 30 States
On a more protective note, 30 states and Washington, D.C., now offer a full 12 months of Medicaid coverage after pregnancy. This is a major change from the longstanding federal minimum, which only guaranteed 60 days of postpartum coverage. The extension was made possible by the American Rescue Plan and then made permanent by the Consolidated Appropriations Act of 2023.
An estimated 462,000 people across those states have gained access to the extended coverage. Oklahoma was the 30th state approved. For the remaining 20 states that haven’t adopted the full extension, new mothers on Medicaid still lose coverage just two months after giving birth, a period when complications like postpartum hemorrhage, infections, and mental health crises remain common.
The Coverage Gap Still Affects 10 States
Medicaid expansion under the Affordable Care Act was designed to cover adults earning up to 138% of the federal poverty level, roughly $20,800 a year for an individual. As of late 2025, 41 states (including D.C.) have adopted expansion. Ten states have not: Texas, Wisconsin, Kansas, Florida, Wyoming, Tennessee, Mississippi, Alabama, South Carolina, and Georgia (Georgia offers only a limited pathway through its work requirement waiver, not full expansion).
In those non-expansion states, a “coverage gap” persists. Adults who earn too much to qualify for their state’s traditional Medicaid program but too little to qualify for marketplace subsidies are left with no affordable coverage option at all. This gap disproportionately affects people working in low-wage jobs without employer-sponsored insurance, particularly in the South.
Home Care Waiting Lists Remain Long
Medicaid is also the country’s largest payer for long-term care, covering nursing homes and home-based services for older adults and people with disabilities. But demand for home and community-based services (HCBS) far outstrips capacity. As of 2025, more than 552,000 people across the country are on waiting lists for Medicaid-funded home care. Some states call these “interest lists” or “referral lists,” but the reality is the same: people who qualify for help are waiting months or years to receive it.
These waiting lists exist because HCBS programs are optional for states (unlike nursing home coverage, which Medicaid is required to provide). States set caps on enrollment, and when slots fill up, new applicants wait. The result is that many people who could live independently with some support end up in institutional care, or go without services entirely, relying on family members to fill the gap.
Federal Funding Pressures
The federal government pays at least 50% of each state’s Medicaid costs, with poorer states receiving a higher match. For fiscal year 2025, the federal share ranges from 50% in wealthier states like New York and California to nearly 77% in Mississippi. This matching structure means that any federal cuts ripple through state budgets, since every dollar a state loses in federal matching effectively forces it to either spend more of its own money or cut benefits and eligibility.
Ongoing budget negotiations in Congress have put Medicaid funding squarely on the table. Proposals to reduce federal Medicaid spending by hundreds of billions of dollars over the next decade would likely force states to shrink their programs, whether through tighter eligibility, reduced benefits, lower payments to doctors and hospitals, or some combination. For the roughly 80 million people enrolled in Medicaid and CHIP, and for the hospitals and clinics that depend on Medicaid reimbursement, the stakes of these negotiations are enormous.