Williams County produces more than 500,000 barrels of oil daily from the Bakken Formation, creating employment patterns that defy traditional verification assumptions. Contract workers cycle through months of 80-hour weeks followed by gaps when contracts end or prices decline. Temporary housing arrangements shift with work locations. Documentation comes from staffing agencies rather than direct employers. The oil economy that drives North Dakota’s exceptionally low unemployment rate simultaneously creates verification challenges that a state with 23,000 affected expansion adults must solve without the administrative infrastructure that larger states possess.
H.R. 1, signed July 4, 2025, transformed Medicaid work requirements from a state-option policy experiment into a federal mandate affecting approximately 18.5 million expansion adults nationwide. The law requires 80 hours monthly of work, education, training, or qualifying community engagement activities, with semi-annual redetermination cycles replacing the annual reviews most states had been conducting. States face a January 1, 2027 implementation deadline, though good-faith extensions are available through December 31, 2028 for states demonstrating genuine progress toward compliance infrastructure.
CMS issued its first substantive implementation guidance on December 8, 2025, establishing several parameters that shape state planning. States must use reliable data sources to verify compliance before requesting documentation from enrollees, a data-first approach that privileges automated verification over member-initiated reporting. A 30-day cure period is required between initial non-compliance determination and coverage termination, during which members can demonstrate they were meeting requirements or qualify for exemptions. Congress allocated $200 million in implementation funding, half distributed equally across states and half proportional to affected population.
Two provisions create particular downstream pressure. Individuals who lose Medicaid coverage for work requirement non-compliance are barred from receiving premium tax credits on the ACA marketplace, meaning non-compliance creates 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 And the Trump administration rescinded Biden-era guidance on health-related social needs services in March 2025, while CMS has signaled it will not approve new or extend existing continuous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, narrowing the flexibility states had been using to stabilize enrollment.
For North Dakota, these federal requirements arrive in a state that officials project will see minimal coverage impact. With unemployment at 2.5 to 2.6 percent, among the lowest nationally, and 72 percent of expansion adults already working, the state anticipates that only 3 to 5 percent of the Medicaid population will be affected, translating to approximately 1,000 to 1,500 people. Whether this confidence proves warranted depends on implementation execution rather than economic conditions alone.
Rural Health Transformation Funding#
North Dakota submitted its Rural Health Transformation Program application to CMS in early November 2025, proposing to invest more than $500 million over five years to strengthen rural healthcare by improving access, quality, and outcomes. The state received $199 million for fiscal year 2026 in late December, with annual awards expected to continue through 2030 based on performance and implementation.
Governor Kelly Armstrong convened a special legislative session beginning January 21, 2026 to appropriate the funding. House Bill 1623, signed by Armstrong on January 23, appropriates $397.9 million for the program for the 2025-2027 budget cycle, assuming the second-year award matches the first. The state plans to dedicate $33.4 million to technology infrastructure, $116 million to expand healthcare access in rural areas, $32.2 million to address workforce issues, and $17.1 million to promote healthy lifestyles.
Armstrong has emphasized mobile health clinics and telehealth infrastructure expansion as particularly important elements, noting that avoiding 100-mile drives in blizzards for appointments that could be handled remotely represents meaningful access improvement. The funding will support healthcare touchpoints that could potentially assist with work requirement verification and exemption documentation, though the rural health transformation program addresses healthcare capacity rather than coverage verification systems directly.
The funding does not eliminate the tension between work requirements and rural healthcare sustainability. Rural hospitals benefit from infrastructure investment but still face coverage loss impacts if work requirements disenroll significant populations. The $500 million over five years offsets some concerns but does not substitute for the coverage stability that rural healthcare providers depend upon.
State Profile and Political Context#
North Dakota’s 23,000 expansion adults represent approximately 3 percent of the state’s 780,000 residents. This is the smallest affected population among expansion states, creating both implementation advantages and constraints. The small scale allows for potentially more personalized approaches than massive states can contemplate, but it also means the state lacks the administrative infrastructure that larger states have built and must invest in systems whose fixed costs hit proportionally harder.
The state operates its Medicaid program through a single managed care organization, Sanford Health Plan, covering approximately 60 percent of total Medicaid enrollees. The remaining 40 percent receive services through fee-for-service arrangements. This single-MCO structure simplifies coordination compared to states managing relationships with five or ten competing plans, though it also creates single-vendor dependency for work requirement implementation systems.
Governor Armstrong, who took office in December 2024, has explicitly endorsed federal work requirements. In July 2025, Armstrong stated that “if you’re able to work and you’re on government assistance, you should have to work.” This positions North Dakota as an enforcement-oriented state that will implement work requirements as designed rather than seeking maximum exemptions or building extensive coverage-protective infrastructure.
The state legislature is Republican-controlled, creating unified government support for work requirement implementation. North Dakota expanded Medicaid in 2014 following passage of legislation signed by Republican Governor Jack Dalrymple, and the state has reauthorized expansion through successive legislative sessions, most recently extending the program through 2027. The state’s decision not to pursue work requirements during the 2018 to 2020 waiver wave likely reflected the assessment that most expansion adults were already working and that administrative infrastructure investment would be substantial for a small population.
Employment Patterns and Verification Infrastructure#
State unemployment consistently remains below 3 percent, among the lowest nationally. Labor force participation is strong, and 72 percent of Medicaid expansion adults are already working, with 44 percent in full-time employment and 28 percent in part-time positions. These figures suggest that most enrollees are already performing qualifying activities, making work requirements primarily a documentation test rather than an employment incentive.
However, the state’s dominant industries create verification complexities. Oil and gas production in the Bakken Formation drives western North Dakota employment, with four core producing counties experiencing boom-bust cycles, temporary contract work, high turnover, and out-of-state workers cycling through. Oil field employment often involves irregular schedules, contract arrangements without traditional employer documentation, and workers who may not maintain North Dakota residency.
Agricultural employment, the state’s traditional economic base, features seasonal patterns where spring planting and fall harvest create intense work periods followed by slower winter months. Livestock operations provide year-round employment, but crop agriculture does not. Verification systems must accommodate workers whose hours vary predictably with agricultural cycles or face monthly compliance fluctuations even among employed individuals.
North Dakota plans to leverage existing systems rather than building new work verification infrastructure. The state has indicated it will reuse systems currently tracking work requirements for other programs, likely SNAP Employment and Training systems or TANF work participation systems. Whether these systems, designed for different populations and compliance thresholds, can accommodate Medicaid work requirements without modification remains to be seen.
The Department of Health and Human Services administers Medicaid eligibility through Human Service Zone offices distributed across the state. These offices already handle SNAP work requirements, TANF work participation, and other means-tested program compliance. Integration across programs could reduce administrative burden for both the state and enrollees, as someone complying with SNAP requirements could receive deemed compliance for Medicaid purposes. However, the overlapping requirements also multiply documentation burdens if systems remain siloed.
Tribal Populations and IHS Exclusion#
North Dakota has five federally recognized tribes: Mandan, Hidatsa, and Arikara Nation; Spirit Lake Nation; Standing Rock Sioux Tribe; Turtle Mountain Band of Chippewa Indians; and Sisseton-Wahpeton Oyate. Approximately 31,000 American Indians live in North Dakota, representing about 4 percent of the state’s population.
Federal law exempts American Indians from work requirements, but the exemption’s implementation creates coordination challenges. Tribal members who receive services through Indian Health Service facilities should automatically qualify for exemptions, but verification systems must identify tribal membership and IHS service access. The state’s coordination with tribes on exemption processing will determine whether eligible individuals maintain coverage or face documentation barriers.
The state has existing relationships with tribal governments through Medicaid program administration, and the compact geography of North Dakota’s reservations compared to larger western states should facilitate coordination. However, exemption systems must be designed with tribal consultation and must accommodate the reality that some tribal members live off-reservation and may access healthcare through non-IHS providers.
Rural Healthcare Infrastructure and Critical Access Hospitals#
North Dakota operates thirteen Critical Access Hospitals providing the only acute care across vast rural territories. Five of these hospitals have volunteer Emergency Medical Services without paramedics. Several operate at net losses despite Critical Access Hospital designation and Medicare swing-bed reimbursements. The state’s rural healthcare system functions on thin margins, and Medicaid coverage stability matters enormously to financial viability.
The North Country Health Consortium, representing rural providers, has emphasized that Medicaid expansion reduced uncompensated care burdens that threatened rural hospital sustainability. Coverage losses from work requirements would reverse those gains. State officials project minimal coverage impact, but even 1,000 to 1,500 disenrollments concentrated in rural counties could affect hospital finances if those individuals delay care and eventually present in emergency departments without coverage.
The $500 million Rural Health Transformation funding addresses infrastructure, workforce, and technology but does not replace the coverage that Medicaid expansion provides. Rural hospitals need both infrastructure investment and stable patient coverage to remain viable. The state must balance work requirement implementation with rural healthcare sustainability, a tension that Governor Armstrong’s explicit support for requirements may not fully account for.
Implementation Timeline and Federal Guidance#
Sarah Aker, executive director of medical services for the Department of Health and Human Services, indicated in September 2025 that receiving detailed federal guidance before the end of 2025 would be “very optimistic.” The department is planning a public information campaign but is waiting for federal specifics before launching outreach. Aker noted that the state hopes to use as much existing reporting infrastructure as possible to minimize burden.
The December 8, 2025 CMS guidance provided parameters but left substantial detail for future rulemaking. North Dakota’s assessment that guidance might not arrive until 2026 proved accurate, as full implementation regulations remain under development. The state’s strategy appears to be building capacity within existing systems while awaiting clarity on exemption documentation requirements, verification protocols, and reporting timelines.
The state has not announced detailed exemption policies beyond federal minimums. Given Governor Armstrong’s enforcement orientation, North Dakota will likely not seek to maximize exemption categories or extend good cause exceptions beyond what federal law requires. The state may calculate that with 72 percent of expansion adults already working and extremely tight labor markets, broad exemptions are unnecessary.
Projected Impacts and State Confidence#
State officials project that only 3 to 5 percent of the Medicaid population will be affected by work requirements, translating to approximately 1,000 to 1,500 people losing coverage. This projection reflects confidence that most enrollees are already working or qualify for exemptions, and that verification systems will identify compliance rather than create documentation barriers.
Whether this confidence proves warranted depends on execution details not yet determined. Exemption processing rigor will matter, as populations with disabilities, caregiving responsibilities, and health limitations must be able to document exemption eligibility without administrative burden exceeding their capacity. Verification system adequacy will matter, as contract workers, seasonal employees, and self-employed individuals need documentation processes that accommodate their employment realities.
Tribal coordination effectiveness will matter, as automatic exemptions for American Indians require systems that can identify tribal membership and IHS service access without placing documentation burden on individuals who federal law exempts. Provider engagement will matter, as rural healthcare systems must support exemption documentation for patients with qualifying conditions without undermining therapeutic relationships or creating uncompensated administrative burden.
The gap between state confidence and implementation reality will determine outcomes. Officials who believe work requirements will affect only 3 to 5 percent of enrollees may not invest adequately in systems and processes that would catch the additional 5 to 10 percent who fall through cracks in verification, exemption processing, and communication. The difference between projected and actual coverage losses will measure whether North Dakota’s preparedness matches its self-assessment.
What North Dakota Is Expected to Do#
North Dakota will implement work requirements with an enforcement orientation that reflects both ideological commitment and confidence that implementation will not produce catastrophic outcomes. The state’s exceptionally favorable position, high employment rates, small expansion population, single-MCO administration, and existing system infrastructure create conditions for manageable implementation if execution matches planning.
The state approaches work requirements from an unusually favorable position compared to larger states with weak labor markets, multiple competing MCOs, and hundreds of thousands of affected enrollees. North Dakota’s advantages are not replicable elsewhere, and its experience will indicate whether work requirements can function without extensive mitigation infrastructure in states that share similar characteristics, small size, strong economies, and administrative capacity, rather than providing guidance for implementation in fundamentally different contexts.
The key risk lies in the gap between state confidence and implementation reality. The state’s characterization that national discussion overstates impacts on North Dakota may prove accurate, but it may also reflect underestimation of verification challenges, exemption processing complexity, and the administrative burden that even well-designed systems impose. If coverage losses remain at 3 to 5 percent, North Dakota’s assessment will be vindicated. If losses approach 10 to 15 percent because documentation barriers exceed state expectations, the same factors that make North Dakota unusual will limit lessons for other states.
For small, prosperous states with similar characteristics, North Dakota’s experience will indicate whether work requirements can function without extensive mitigation infrastructure. For larger states, states with higher unemployment, or states with weaker administrative capacity, North Dakota offers limited guidance. The implementation that works in a state with 23,000 affected adults, 2.5 percent unemployment, and unified political support for enforcement may not translate to states measuring affected populations in hundreds of thousands with contested political environments and struggling labor markets.