At Yale’s APEX, Experts Explore How States Are Navigating New Medicaid Rules

In 2017,  Arizona Republican Sen. John McCain cast the decisive vote against Republican efforts to repeal major parts of the Affordable Care Act, commonly known as Obamacare. At the time, the Congressional Budget Office estimated that passing the “skinny repeal” bill would mean 23 million fewer people would have health insurance by 2026.

With last year’s One Big Beautiful Bill Act (OBBBA), Republicans achieved similar results, particularly through major cuts to Medicaid, the joint federal and state program to provide health coverage for millions of Americans with limited resources.

Last month, the Yale Institution for Social and Policy Studies’ American Political Economy eXchange (APEX) invited Jamila Michener of Cornell University and Miranda Yaver of the University of Pittsburgh to explore the future of Medicaid under the new law.

“This is not a question of what would be the best Medicaid policy going forward,” said Jacob Hacker, APEX director and Stanley Resor Professor of Political Science at Yale.  “But what are the new political realities, conditions, and policy possibilities that are created by the law.”

Michener drew on extensive fieldwork to describe how states are struggling to interpret and execute the new law with little guidance from the federal government despite rigid deadlines.

“The way to describe what’s happening right now in state Medicaid agencies is just chaos,” Michener said. “States are really in the wild, wild west trying to figure out how to implement this stuff.”

States with limited administrative, fiscal, and technical infrastructure face particular challenges.

“Low-capacity states are at such a disadvantage,” she said. “These are places where we see the most carelessness and the least effective implementation practices.”

Yaver argued that the new law fundamentally altered Medicaid’s federalist structure by limiting states’ ability to exercise discretion.

“What this new legislation does is it ties states’ hands,” Yaver said. “It says they cannot be more generous in their administration of benefits, even with their own state-specific funds.”

Hacker noted how the law’s new work requirements for Medicaid eligibility aim less to increase employment than to impose obstacles to enrollment.

“The clear intention is to basically indirectly cut people off from benefits by imposing what are called administrative burdens,” Hacker said.

Yaver noted that 92% of Medicaid beneficiaries already work or qualify as exempt from work requirements. Disenrollment flows from paperwork, reporting failures, and bureaucratic barriers — not eligibility changes.

“The Congressional Budget Office estimates that the new Medicaid requirements will have zero effect on the number of beneficiaries who are working,” Hacker said. “And there is a reliable estimate that at least two in three of the enrollees who would be cut off are people who are mistakenly prevented from receiving benefits.”

As an example, Yaver discussed Arkansas’ program, where in 2018 eligible beneficiaries needed to follow a 13-step process to document work or an 11-step process to document an exemption.

“About 400,000 people were estimated to be eligible in Georgia,” Yaver said. “They have never enrolled more than 11,000.”

Michener warned how states exempting people from work requirements under the statutory category of medical frailty can exacerbate racial inequality.

“You should think twice before you rely on these medical codes, because we know that Black people are consistently and systematically underdiagnosed,” she said. “When we think about medical frailty, that assumes access to care. That you have a doctor diagnosing those exempted conditions.”

Yaver warned that Medicaid cuts will ripple far beyond enrollees.

“Hospitals are already operating in the red,” she said. “When a rural hospital closes, your average driving distance to the next one increases by about 30 miles. That’s going to affect everyone.”

In a discussion about how a political realignment could reverse these changes, Yaver and Michener agreed that implementation is unavoidable before the 2028 election. But they said discretion and non-enforcement could play an important role under future administrations.

Michener emphasized documenting and organizing, citing an example in Kentucky where lawmakers proposed restricting the Medicaid transportation benefit by requiring beneficiaries to produce a note from an auto mechanic proving their car was broken.

“Enough people reached out that they just stopped in their tracks with it,” Michener said. “It took like 150 people telling some of their elected officials that they were really mad.”

She suggested that people could organize around the unpopularity of the law’s provisions.

“We exist in a moment where it’s perfectly feasible to do something that massive numbers of people don’t support and expect that you’re still going to be OK politically,” Michener said. “We can change that.”