Oregon is asking the federal government to postpone new Medicaid requirements scheduled for January 1, 2027, as state agencies prepare eligibility changes that could interrupt health coverage for adults who fail to document qualifying activities or establish an exemption.
Governor Tina Kotek joined governors from California, Maine, New Mexico and Virginia in an October 1 appeal to U.S. Health and Human Services Secretary Robert F. Kennedy Jr. The governors are seeking additional time to complete administrative preparations and reduce coverage disruptions as states implement the federal law.
In Southern Oregon, the changes will reach some Oregon Health Plan members in Josephine and Jackson counties, adding work or activity verification to the process of applying for coverage or maintaining eligibility. The requirements will vary according to each member’s age, coverage category and circumstances, with exemptions available for specified medical conditions, caregiving responsibilities and other qualifying situations.
Oregon has begun sending informational notices and training eligibility workers ahead of the federal deadline. Kotek’s request follows a May multistate appeal for clearer written guidance and greater implementation flexibility. The October request seeks an extension without identifying a specific postponement period.
The requirements stem from Public Law 119-21, the federal budget legislation enacted in 2025. The Centers for Medicare & Medicaid Services is implementing the law’s work and community engagement provisions, which generally require states to begin applying the new eligibility conditions by January 1.
Certain adults ages 19 through 64 covered through Medicaid expansion or specified demonstration programs will have to satisfy the requirements when applying for benefits or undergoing eligibility reviews. Qualifying activities include employment, community service and participation in work programs, with combinations of those activities permitted.
Federal guidance establishes several routes to compliance. An affected adult can complete at least 80 hours of qualifying activities in a month, attend an educational program at least half time or meet a monthly income threshold equivalent to 80 hours at the federal minimum wage. That threshold currently stands at $580.
The federal rule also provides exemptions for pregnant and postpartum recipients, medically frail individuals, certain people with disabilities, qualifying caregivers, American Indians and Alaska Natives, and veterans with a total disability rating. Children under 19 and adults 65 and older fall outside the age group covered by the work requirement.
For Southern Oregon households, the eligibility review will determine whether a member must document qualifying activities or falls within a protected category. A parent caring for a child under 14, for example, may qualify for an exemption even though the parent’s age and coverage category otherwise place the person within the affected population.
Oregon Health Authority is sending informational notices to some members who may qualify for exemptions. Those letters describe the approaching changes; subsequent notices will identify any information required from the recipient and the deadline for responding.
Under OHA’s current guidance, members can report an exemption without providing supporting proof in 2027. Additional documentation requirements are expected in 2028. The agency says most Oregon Health Plan members will retain their benefits.
Federal procedures require states to give individuals an opportunity to resolve a verification problem before denying an application or terminating coverage. When compliance cannot be established, a notice must provide 30 calendar days for the person to demonstrate that the requirements have been met or that an exemption applies.
Coverage can end if the issue remains unresolved. Individuals who lose benefits may reapply, although a lapse would leave them without their existing Medicaid coverage until eligibility is established again.
Oregon officials have identified those administrative interruptions as a central concern in the approaching transition. The governors’ request seeks more time to prepare eligibility systems, train personnel and communicate requirements clearly enough for recipients to navigate the process.
A separate legal challenge is addressing federal treatment of people with serious illnesses and disabilities. Attorney General Dan Rayfield joined 23 other attorneys general and two governors in a June 29 lawsuit contesting provisions of the federal implementation rule.
The coalition alleges that federal agencies narrowed protections Congress established for medically frail Medicaid recipients and imposed administrative burdens that could cause eligible people to lose coverage. The complaint also alleges violations of the Administrative Procedure Act, including insufficient consideration of evidence and reasonable alternatives.
The lawsuit challenges particular federal provisions, while Kotek’s October appeal seeks additional implementation time. The coalition is asking the courts to block and strike down the contested provisions.
Further eligibility changes are scheduled for late 2027. OHA says certain adults will move to coverage reviews every six months, while other members generally will undergo annual reviews. Most members currently have eligibility reviewed every two years, and children younger than six generally retain coverage until their sixth birthday.
Those differing schedules mean the federal changes will reach households at different points. In Grants Pass, Medford and surrounding communities, an individual member’s application date, review schedule and coverage category will determine when additional information becomes necessary.
The transition comes as Oregon works to correct existing Medicaid recordkeeping problems. A September Secretary of State audit found duplicate recipient identification numbers and estimated duplicate payments to coordinated care organizations ranging from $232,000 to $4.1 million between 2020 and 2024.
OHA accepted the audit’s recommendations to recover overpayments, improve eligibility worker training and strengthen controls for detecting duplicate records. The audit examined payment accuracy rather than readiness for the January requirements.
The financial stakes extend across Oregon’s health care system. The audit reported approximately $19 billion in Medicaid spending during 2025, including $13 billion in federal funding, with roughly one in three Oregonians relying on the program.
OHA is directing members to keep their mailing addresses, telephone numbers and email information current so eligibility notices reach them. Assistance remains available through Oregon Department of Human Services benefits offices, certified Oregon Health Plan assisters, Benefits.Oregon.gov and the state’s benefits telephone line at 800-699-9075.