Series 14: State Implementation of Work Requirements
Governor Josh Shapiro did not mince words. Pennsylvania, he said after H.R. 1 was signed on July 4, 2025, “got screwed.” The law would cause approximately 310,000 Pennsylvanians to lose Medicaid coverage, he warned, while 25 rural hospitals already operating with deficits faced potential closure from the cascading financial effects. His administration’s 2025-26 budget explicitly “resisted efforts to kick people off Medicaid.” But resistance in a Democratic governor’s mansion meets its limits when the federal government imposes a mandate, and those limits are where Pennsylvania’s real implementation story begins.
H.R. 1 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. States may request good-faith extensions through December 31, 2028. Congress allocated $200 million in implementation funding nationally, and individuals who lose Medicaid for work requirement non-compliance are barred from receiving premium tax credits on the ACA marketplace.
Pennsylvania’s expansion population of approximately 831,000 adults as of late 2024 makes it one of the five largest affected states. The state has not submitted a Section 1115 waiver, has introduced no legislation advancing early implementation, and shows every indication of complying only to the extent federal law absolutely requires. The question is not whether Pennsylvania will resist aggressive enforcement, but whether its distinctive geography creates implementation conditions that produce unequal outcomes regardless of design intent.
Sixty-Seven Counties, Two Realities#
Pennsylvania’s defining characteristic is not its politics or its population size but the chasm between its two population centers and everything in between. Philadelphia and its surrounding counties anchor the eastern end of the state with approximately 40 percent of the expansion population. Pittsburgh and Allegheny County anchor the west with another 15 to 20 percent. Between them stretches a vast expanse of rural, exurban, and small-city Pennsylvania that locals sometimes call Pennsyltucky, a landscape where the infrastructure assumptions embedded in any compliance system begin to break down.
In Philadelphia, public transit via SEPTA connects residents to DHS offices, community health centers, and workforce development agencies. Federally qualified health centers operate throughout the city. Community-based organizations provide enrollment assistance in multiple languages. Internet access is generally available through libraries, community centers, and smartphone connectivity. The city’s concentrated poverty, with 22 percent of residents below the poverty line and 29 percent of children in poverty, is severe, but it exists alongside dense service infrastructure.
In rural central Pennsylvania, none of these assumptions hold. Public transit is minimal or nonexistent. County Assistance Offices may require 45-minute drives over mountain roads. Community organizations are sparse. Broadband remains unavailable in many areas, and cellular coverage is inconsistent in the ridges and valleys of the Appalachian interior. Pennsylvania has one primary care physician for every 522 rural residents compared to one per 222 urban residents. Workforce development centers are scarce, meaning that residents who want to find qualifying activities may struggle to locate them even with full willingness to comply.
This geographic reality means that identical federal requirements will produce fundamentally different compliance environments. A Philadelphia resident can report compliance through a smartphone app on the bus ride to a community health center that provides verification assistance. A Potter County resident may need to drive an hour each way to reach an office that may not have staff trained in work requirement verification. Equal treatment of communities with vastly unequal resources produces unequal outcomes, and this dynamic is baked into Pennsylvania’s geography in ways that no implementation design can fully overcome.
Administrative Structure and SNAP Experience#
Pennsylvania administers Medicaid through the Department of Human Services with County Assistance Offices handling eligibility determinations across all 67 counties. The state operates HealthChoices, a mandatory managed care program covering physical health, behavioral health, and Community HealthChoices for long-term services and supports. Multiple MCOs operate in each region, creating infrastructure for member outreach and care coordination that could be adapted for work requirement compliance support.
The state’s SNAP experience provides partial precedent. Pennsylvania began rolling out SNAP work requirements, specifically ABAWD time-limit changes under H.R. 1, starting September 1, 2025. The Independent Fiscal Office published data showing that SNAP enrollment declined by 158,000, or roughly 8 percent, from the prior year as new requirements took effect. This decline offers an early signal of what documentation-based eligibility conditions produce in Pennsylvania’s administrative environment, though the specific populations and verification mechanisms differ between SNAP and Medicaid.
Pennsylvania operates SNAP Employment and Training through several programs: SNAP EARN providing job skills training and case management, SNAP KEYS partnering with Pennsylvania’s 14 community colleges, and SNAP 50/50 programs offering credential training and work experience. This infrastructure creates coordination opportunities. If members meeting SNAP work requirements receive automatic deemed compliance for Medicaid, administrative burden reduces for people enrolled in both programs. The KEYS community college partnerships could count as qualifying education activities under Medicaid work requirements as well.
However, SNAP E&T serves a considerably smaller population than will face Medicaid work requirements. The 831,000 expansion adults substantially exceed current program capacity. The 170,000 Pennsylvanians who had been covered by SNAP ABAWD waivers across 58 of 67 counties represent a population that was exempted from SNAP work requirements and may now face Medicaid requirements for the first time.
Divided Government and the Compliance Equilibrium#
Pennsylvania’s political dynamics shape implementation in distinctive ways. Governor Shapiro, a Democrat, controls the executive branch and DHS policy direction. Republicans control the state Senate, where the Health and Human Services Committee reported out a package of bills in January 2026 aimed at eliminating waste, fraud, and abuse in public assistance programs. Democrats narrowly control the House, creating a legislative equilibrium where neither chamber can impose its preferences on the other.
This division produces a predictable implementation posture: compliance within federal requirements but without enthusiasm. The Shapiro administration will not pursue early implementation, will not design systems intended to maximize disenrollment, and will interpret exemption categories expansively. But the Republican Senate ensures that any legislative appropriation for implementation infrastructure will face scrutiny, potentially limiting funding for the navigator services and outreach that coverage-protective implementation requires.
DHS Secretary Val Arkoosh, a physician, has emphasized maintaining coverage and addressing healthcare workforce shortages rather than eligibility restrictions. Recent DHS priorities include direct care worker wage increases, rural hospital support, and behavioral health integration. This policy orientation aligns with implementation designs that treat work requirements as a compliance exercise to be managed rather than a behavioral incentive to be maximized.
The Pennsylvania Health Law Project and allied organizations have been conducting community education on H.R. 1’s provisions, including detailed webinars walking through work requirement exemptions and encouraging affected individuals to begin gathering documentation. This advocacy infrastructure will function as de facto navigation support as implementation approaches, filling gaps that state-funded services may not fully cover.
Healthcare System Financial Stakes#
Pennsylvania’s healthcare systems have enormous financial stakes in implementation design. Major systems including Penn Medicine, UPMC, Jefferson Health, and regional providers serve substantial Medicaid populations. Coverage losses translate directly to uncompensated care costs, and the provider tax mechanisms that finance Medicaid match are frozen under H.R. 1’s provider tax provisions.
Twenty-five rural hospitals operate with deficits and high public payer dependence. These facilities serve communities where work requirement compliance may be most challenging due to limited employment options, transportation barriers, and verification difficulties. The Appalachian Regional Commission’s most recent data overview documents the multi-decade economic decline in southwestern Pennsylvania’s former coal and steel communities, where the employment base has contracted even as healthcare demand has grown.
The opioid crisis intersects with work requirements in ways that Pennsylvania understands viscerally. Philadelphia’s Kensington neighborhood is the epicenter of the state’s overdose crisis, with approximately 1,300 annual overdose deaths citywide. Substance use disorder treatment participation may qualify as an exemption under federal requirements, but the documentation and verification processes required to establish that exemption create barriers for precisely the populations least equipped to navigate administrative complexity. Statewide, opioid impact is significant, and the intersection between addiction, employment instability, and coverage continuity will define outcomes for tens of thousands of expansion adults.
The Marketplace and the Coverage Void#
Pennsylvania operates Pennie, a state-based marketplace that provides infrastructure for coverage transitions. But H.R. 1’s provision barring marketplace premium tax credits for individuals losing Medicaid due to work requirement non-compliance eliminates this safety net for the most vulnerable population. Expansion adults earning below 138 percent of the federal poverty level cannot afford unsubsidized marketplace coverage, and the expiration of enhanced premium tax credits at the end of 2025 made marketplace plans more expensive for everyone.
This dynamic transforms implementation design from an administrative question into a humanitarian one. Every procedural failure that results in termination rather than continued coverage creates not a transition but a gap. The state’s healthcare systems absorb the costs of uncompensated care. Emergency departments see increased volume. Chronic conditions go unmanaged. The fiscal calculus that H.R. 1 was designed to produce, lower federal spending through reduced enrollment, is achieved by shifting costs to state providers, local emergency services, and the individuals themselves.
Pennsylvania will likely seek the good-faith extension through December 31, 2028 if it cannot operationalize compliant systems by the January 2027 deadline. Given the state’s lack of prior implementation experience, the compressed timeline between final federal guidance expected by June 2026 and the deadline, and the system development required across 67 counties, extension appears probable. The state’s political orientation means delay will be framed as ensuring proper protections rather than as opposition to requirements, a framing that may or may not satisfy the current HHS Secretary’s interpretation of “good faith.”
What Pennsylvania Reveals#
Pennsylvania is the test case for whether work requirements can function in large, geographically diverse states without reproducing the coverage losses that characterized Arkansas’s brief experiment. The state’s scale, its urban-rural divide, its Democratic administration’s reluctant compliance posture, and its healthcare system vulnerabilities make it representative of the challenges facing most large expansion states.
The 831,000-person expansion population demands scalable verification. Pennsylvania cannot manually process individual compliance determinations for this volume. Some combination of automation using unemployment insurance wage data, cross-program deemed compliance from SNAP participation, and streamlined reporting will be necessary. But automation solves verification for people who are working in formal employment. It does not solve verification for gig workers with variable hours, cash-wage agricultural workers in southeastern Pennsylvania mushroom farms, or formerly incarcerated individuals navigating reentry. The populations most likely to be working but unable to document it are the populations most likely to lose coverage.
Whether Pennsylvania can achieve geographic equity in implementation remains the central analytical question. The state’s answer will inform how other large, diverse states approach the same challenge, and whether the federal mandate produces a single national policy or 50 different policies shaped by local geography, capacity, and political will.