Series 14: State Implementation of Work Requirements
Robert Gordon spent more than $30 million and a year of his life building what he believed was the best possible Medicaid work requirement system. As director of the Michigan Department of Health and Human Services under Governor Gretchen Whitmer, he had inherited a mandate from the Republican legislature and a clear instruction from the federal courts in Arkansas: do not repeat what happened there. His team reprogrammed eligibility systems, designed plain-language communications tested with actual enrollees, built phone and online reporting channels, trained navigators, and established automatic deemed compliance for people already meeting work requirements through SNAP or TANF. When work requirements took effect on January 1, 2020, Michigan was as ready as any state had ever been. And even so, Gordon’s own analysis showed that more than 100,000 Michiganders were on track to lose coverage within the year. “That’s the population of the city of Flint who were on track to lose their insurance,” he wrote in a May 2025 Commonwealth Fund essay. “We’re implementing this about as well as this thing can be implemented, and it is still going to be pretty catastrophic.”
A federal judge struck down Michigan’s waiver in March 2020, sixty days into implementation, before anyone actually lost coverage. The pandemic suspended all disenrollments anyway. In January 2025, Whitmer signed legislation repealing the state work requirement statute entirely, passed during the Democratic lame-duck session before Republicans reclaimed the House majority. Five months later, H.R. 1 made that repeal functionally irrelevant by imposing a federal mandate that supersedes state law.
Michigan now faces a peculiar version of the national implementation challenge. It is the only state that has both attempted work requirements with genuine investment in doing them well and concluded, from its own experience, that they cannot be implemented without significant coverage losses. That institutional memory, the design templates, the navigators trained, the systems built, and above all the knowledge of what still goes wrong even under optimal conditions, makes Michigan’s second attempt the most informed in the country. Whether information translates to better outcomes when the mandate comes from Congress rather than the state legislature remains the central question.
The Federal Mandate#
H.R. 1, signed July 4, 2025, requires 80 hours monthly of work, education, training, or qualifying community engagement activities for Medicaid expansion adults, with semi-annual redetermination cycles and a January 1, 2027 implementation deadline. CMS issued initial guidance on December 8, 2025, establishing a data-first verification approach and requiring a 30-day cure period before coverage termination. Good-faith extensions are available through December 31, 2028. Congress allocated $200 million in implementation funding nationally.
Two provisions create particular downstream pressure. Individuals who lose Medicaid for work requirement non-compliance are barred from receiving premium tax credits on the ACA marketplace, creating a coverage void rather than a coverage transition. And the Trump administration rescinded Biden-era guidance on health-related social needs services in March 2025, while CMS has signaled it will not approve new or extend existing continuous eligibility waivers.
Michigan’s Healthy Michigan Plan covers approximately 711,000 to 750,000 adults, making it one of the largest expansion populations nationally. The Michigan Department of Health and Human Services estimates that between 100,000 and 290,000 beneficiaries could lose coverage in the first year of implementation, depending on exemption design and verification processes. State officials estimate administrative costs of approximately $75 million, more than double the $30 million spent on the 2020 attempt, reflecting the expanded scope and more complex federal requirements.
What Michigan Learned the First Time#
Michigan’s 2020 implementation, though brief, generated findings that no other state possesses from direct experience. The state discovered that most enrollees were already meeting the law’s requirements. Roughly 60 percent of Healthy Michigan Plan enrollees were already working, enrolled in school, or serving as homemakers. Many others qualified for exemptions based on medical frailty, caregiving, disability, or age. The population that actually needed to change its behavior to comply was considerably smaller than the population that needed to navigate verification systems to prove existing compliance.
This distinction, between the population that does not meet requirements and the population that cannot document meeting them, proved to be the defining operational challenge. Michigan invested in human-centered design for member communications, testing all notices with actual enrollees before deployment. The state built multiple reporting channels including online portal, telephone hotline, mail, and in-person options to avoid the digital-only trap that contributed to Arkansas’s catastrophic outcomes. Navigator organizations participated in system design reviews. Cross-program deemed compliance automatically recognized SNAP and TANF work activity without requiring separate Medicaid documentation.
Even with all of this, Gordon’s team projected that more than 100,000 people, many of them working or qualifying for exemptions, would lose coverage through verification failures rather than genuine non-compliance. Communication design could not overcome fundamental policy complexity. Navigators encountered questions they could not answer because the compressed implementation timeline left gaps in training. Reporting system uptake was gradual, and initial rates suggested large numbers of enrollees had not yet engaged with new requirements. The two months of actual operation before the federal court ruling were insufficient to determine whether engagement would have increased or whether significant populations would have remained unreported.
The cost data is equally instructive. Michigan spent more than $30 million on implementation and would have spent more than twice that had the program continued. Reprogramming eligibility systems, training staff across 83 counties, conducting member outreach, and operating verification infrastructure consumed resources that could have been directed toward healthcare delivery. The state now estimates the federal mandate will cost approximately $75 million in administrative expenses, in a program that the MDHHS describes as already “lean” with “less room to cut.”
Two Peninsulas, One Policy#
Michigan’s geography imposes implementation constraints that compound administrative complexity. The state spans 83 counties across two peninsulas separated by the Straits of Mackinac. Detroit and its surrounding Wayne, Oakland, and Macomb counties contain approximately 40 percent of the expansion population, with dense service infrastructure, robust public transit, and extensive community organizations. Grand Rapids, Flint, Lansing, and Ann Arbor provide secondary urban concentrations with meaningful but thinner support networks.
The Upper Peninsula is a different implementation environment entirely. Its communities are closer to Wisconsin or Minnesota than to the Michigan population centers that drive state policy. Broadband access is limited. Public transit is functionally nonexistent. MDHHS offices require long drives over two-lane roads. Employment options are constrained by seasonal tourism, mining, and forestry economies where hours fluctuate in ways that make monthly documentation inherently difficult. The fifteen counties and six cities exempted from SNAP work requirements under H.R. 1’s ABAWD provisions, including Alcona, Alger, Luce, Mackinac, Schoolcraft and others in the Upper Peninsula plus Detroit, Flint, Jackson, and Saginaw, signal where federal authorities themselves recognize that labor market conditions make work requirements operationally problematic.
Michigan’s twelve federally recognized tribes, concentrated in the Upper Peninsula and northern Lower Peninsula, present additional coordination requirements. Tribal members eligible for Indian Health Service coverage qualify for automatic exemption under federal work requirements, but verifying IHS eligibility and enrollment status requires tribal-state data sharing that does not currently exist in automated form. Several tribes operate their own health systems and social service programs, creating parallel infrastructure that the state verification system must recognize.
The demographic composition of the expansion population creates linguistic and cultural challenges that extend well beyond standard bilingual requirements. Wayne County hosts the largest Arab-American concentration in the nation, centered in Dearborn and Hamtramck, with significant Arabic and Chaldean language needs. Detroit and Grand Rapids serve as refugee resettlement hubs for Burmese, Syrian, Congolese, and Iraqi communities. Western Michigan’s agricultural regions employ Hispanic and Latino seasonal workers whose employment patterns make monthly hour verification particularly challenging.
The Political Reversal#
Michigan’s political landscape shifted dramatically between the 2020 implementation attempt and the current federal mandate. In 2020, Whitmer governed with a Republican-controlled legislature that had passed the work requirement statute. Democrats gained full control after the 2022 elections, used the 2024 lame-duck session to repeal the work requirement law, and Whitmer signed the repeal on January 21, 2025, effective April 2. The Republican wave in November 2024 then returned the House to Republican control with a 58-52 majority, while Democrats retained the Senate and governorship.
This divided government creates a dynamic similar to Pennsylvania’s. The Whitmer administration controls implementation design through MDHHS but requires legislative cooperation for appropriations. Republicans who criticized the repeal as premature now have leverage over funding decisions. State Representative John Roth captured the Republican perspective when he said the work requirement was “meant to help, not hinder, Medicaid recipients” and predicted the Supreme Court would reverse court decisions blocking requirements. The federal mandate effectively vindicated the Republican position legislatively, even as the state repeal attempted to foreclose it.
Governor Whitmer signed an executive directive on April 16, 2025, instructing MDHHS to prepare a comprehensive report on the impact of proposed federal Medicaid cuts, including work requirements. The directive ordered analysis of coverage losses, hospital financial exposure, employment effects, and administrative costs. The administration framed this as protecting “2.6 million Michiganders” who rely on Medicaid and positioned the state as a defender of coverage against federal overreach. Senior Deputy Director Meghan Groen testified that the potential coverage losses would represent “a massive hit to Michigan’s healthcare infrastructure.”
The October 2025 bipartisan budget protected Medicaid from state-level cuts, but the budget cannot shield the program from federal mandates. Michigan will implement work requirements because it must, and the Whitmer administration will design implementation to minimize coverage losses. Whether the Republican House supports funding for the navigator infrastructure, outreach capacity, and system development that protective implementation requires will determine whether Michigan’s second attempt benefits from its first-attempt investments or faces the same challenges with less support.
Provider Tax and Financing Vulnerability#
Michigan faces a distinctive financing challenge that H.R. 1 compounds. The state’s Insurer Provider Assessment generates approximately $475 million in federal matching funds annually, offsetting General Fund Medicaid costs. H.R. 1 froze provider taxes at current levels and prohibited new taxes, while CMS has flagged Michigan as one of approximately seven states whose provider tax structures operate under uniformity waivers that face new restrictions potentially taking effect as early as April 2026.
Michigan submitted formal public comments to HHS in July 2025 requesting a three-year transition period and the ability to secure federal approval for a budget-neutral replacement tax. The state acknowledged that transitioning to a compliant tax structure would require statutory changes, creating a legislative challenge in divided government. If the Insurer Provider Assessment is disrupted before a replacement is in place, the revenue loss would compound the enrollment-driven revenue decline from work requirement disenrollments.
The managed care infrastructure remains robust. Ten Medicaid Health Plans serve the expansion population, providing member engagement, care coordination, and data systems that could support verification. During the 2019-2020 planning process, several MCOs developed navigator partnerships and member communication strategies. Some of this institutional capacity remains, though staff turnover since 2020 has eroded organizational memory. The MCO reprocurement cycle offers an opportunity to embed work requirement responsibilities into new contract terms, similar to Illinois’s approach.
The Evidence Michigan Produced#
University of Michigan researchers published findings in late 2025 demonstrating that Medicaid coverage itself was associated with employment gains, not the reverse. The study found that enrollees who were unemployed when they entered the Healthy Michigan Plan experienced increased employment as their health improved. This evidence directly contradicts the behavioral premise of work requirements, suggesting that coverage stability promotes employment rather than coverage conditionality incentivizing it.
Michigan’s experience also produced the most detailed cost-benefit analysis available from any implementing state. The $30 million spent on sixty days of operation, with projections exceeding $70 million for full implementation, against state savings estimated at $5 to $20 million per year from enrollment reductions, suggests that work requirements cost considerably more to administer than they save in coverage expenditures. The federal mandate shifts some costs to the $200 million national implementation fund, but Michigan’s $75 million estimate for the current round exceeds what it would receive from its proportional share of that allocation.
The MDHHS presentation on H.R. 1 prepared for state legislators included a framework that captures the state’s analytical position: “Administrative Burden = Coverage Loss. Many enrollees meet requirements, but may lose coverage due to inability to navigate complex reporting systems.” This is not advocacy language. It is an empirical conclusion drawn from Michigan’s own implementation data, and it echoes the findings from Arkansas where 95 percent of coverage losses occurred among people who were working or qualified for exemptions.
What Michigan’s Second Attempt Means#
Michigan is the experiment within the experiment. Every other state implementing work requirements for the first time is doing so without operational experience. Michigan alone has design templates, cost data, navigator training materials, system specifications, and outcome projections from actual implementation. The state knows what $30 million buys and what it does not. It knows that human-centered design improves but does not solve the communication challenge. It knows that deemed compliance reduces but does not eliminate verification burden. It knows that even under the most favorable conditions, six-figure coverage losses are projected.
The federal mandate adds complexity that did not exist in 2020. Semi-annual redetermination cycles double the verification frequency. The marketplace exclusion provision eliminates the coverage fallback that existed under the prior waiver. The HRSN rescission removes flexibility the state might have used to address social determinants that affect compliance capacity. The SNAP work requirements rolling out simultaneously through Michigan beginning December 1, 2025, with county-level exemptions, create cross-program coordination demands that the 2020 system did not face.
Whether Michigan’s institutional memory translates to meaningfully better outcomes depends on variables the state does not fully control. Federal guidance may permit or restrict the exemption interpretations and deemed compliance provisions that formed the backbone of Michigan’s protective design. Divided government may support or starve the administrative investment that implementation requires. The 711,000-person population demands verification infrastructure that scales beyond anything attempted in 2020’s initial phase-in.
Michigan’s answer to these questions will carry more weight than any other state’s, precisely because Michigan has already answered the preliminary question that every other state is still asking: can this be done well? Michigan’s experience suggests it can be done better or worse, but that the gap between “as well as possible” and “without significant harm” may not be closeable.