A. Overview

Title XIX of the Social Security Act (the Act) authorizes Federal grants to States for Medicaid programs to provide medical assistance to people with limited income and resources. While Medicaid programs are administered by the States, the program is jointly financed by the Federal and State governments. As such, the Centers for Medicare & Medicaid Services (CMS) and State agencies share responsibility for administering and ensuring the overall fiscal and programmatic integrity and effectiveness of the Medicaid program. This joint Federal-State partnership is the cornerstone of Medicaid. Enacted in 1965, Medicaid was created to serve and support vulnerable populations, including: children living in low-income households, caretaker relatives with dependent children, seniors, and individuals with disabilities receiving Supplemental Security Income (SSI). In the 1980s and 1990s, the Medicaid statute was amended to enable coverage of additional services and populations, for example home and community-based services, pregnant women and infants (up to 1 year of age), and higher-income children (aged 6 through 18 under 100 percent of the Federal poverty level). The Patient Protection and Affordable Care Act of 2010, ( Pub. L. 111-148 , enacted March 23, 2010), as amended by the Health Care and Education Reconciliation Act of 2010 ( printed page 33349) ( Pub. L. 111-152 , enacted March 30, 2010), together referred to as the Affordable Care Act (ACA), expanded Medicaid eligibility to include non-pregnant adults with income up to 133 percent of the Federal poverty level (also known as the adult group). Each of these coverage expansions not only grew the number of eligible beneficiaries Medicaid serves, but also contributed, along with benefits expansions and rising health costs generally, to increased Medicaid spending. In fiscal year (FY) 2025, approximately 82.4 million individuals were enrolled in Medicaid, roughly 20 million of whom were enrolled in the adult group. [ 1 ] Total State and Federal combined Medicaid spending for FY 2025 was nearly $1 trillion, with approximately $200 billion attributable to adult group expenditures. [ 2 ]

Presently, States are not required to provide coverage to the adult group. [ 3 ] States that have elected to provide coverage to the adult group have primarily done so using State plan authority. The adult group consists of low-income individuals (up to 133 percent of the Federal poverty level) who are age 19 to 64, not pregnant, not entitled to or enrolled in Medicare Part A or B, or described in any other mandatory eligibility groups (for example, parent and caretaker relatives, children, or individuals eligible based on their receipt of SSI). Individuals are determined eligible based on income and household size, State residency, and citizenship and immigration status. Unlike other Federal means-tested public assistance programs such as Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF), community engagement or work requirements have not historically been a condition of eligibility in the Medicaid program under title XIX of the Act. However, some States have applied such requirements through a section 1115 demonstration. The community engagement requirement will apply in States that have elected the adult group through the State plan or that have a section 1115 demonstration that covers a similar population to which the requirement applies. To date, 40 States and the District of Columbia have expanded Medicaid [ 4 ] and will be subject to the new community engagement requirement. States that have partially expanded Medicaid through a section 1115 demonstration and additional States that have applicable individuals (defined later in this rule) eligible to enroll or enrolled in a section 1115 demonstration will also be subject to the new community engagement requirement. [ 5 ]