Conditional Coverage: When Paperwork Replaces Policy in Medicaid

The “One Big Beautiful Bill” claims not to cut Medicaid—but budget experts, including Congress’s own analysts, say otherwise. The law is projected to claw back $1 trillion in federal Medicaid funding and is expected to eliminate health coverage for 10 million Americans. The White House flatly rejects that this policy constitutes a cut, but removing funding and reducing individuals’ eligibility, for Medicaid is a cut—just one carried out through behind-the-scenes paperwork instead of public policy. This is part of a broader pattern of gaslighting: insisting up is down, cuts aren’t cuts, and consequences are simply someone else’s fault. If a patient (or 10 million) loses coverage because their paperwork didn’t go through, or because of some other bureaucratic error—how is that not a cut?

Some have claimed that the law actually strengthens Medicaid by requiring able-bodied adults to work, volunteer, or go to school to stay covered. But most people on Medicaid already do—according to the Kaiser Family Foundation, 64% of nondisabled adults on Medicaid have jobs, and most others are in school, caretaking, or are otherwise too sick to work. That leaves just 8% of adults who might be affected by this policy—and even those aren’t “freeloaders”, as some have claimed. Many are older, in rural areas, or struggling to find work. The notion of lazy, able-bodied, adults simply choosing Medicaid over work is much more myth than fact—but makes politically useful fiction. Do we really believe that cutting off the lifeline of insurance is what finally motivates someone to find work in a region without jobs?

The real impact of—and the broader goal behind—the law is to create a massive administrative burden for millions of patients throughout the country. Starting in 2027, more than 20 million Americans will have to log into a new federal system to report their work status. That means uploading documents, navigating potentially glitchy submission portals, and risking their own healthcare coverage if something goes wrong throughout this ongoing process. States will have to rush to build these systems—at costs of up to $463 per person, based on past experience. And since the Department of Health and Human Services isn’t expected to issue rules until mid-2026, states will likely have just six months to design, test, and launch systems that will determine whether people keep or lose their insurance. What happens when those systems fail—when someone loses coverage over something as basic as a system timeout or a misfiled form?

In Pennsylvania, we’ve seen how red tape—not eligibility—can push people out of Medicaid. During the unwinding of the COVID-era continuous coverage protections, over 380,000 Pennsylvanians lost Medicaid in the first year, and more than 60% of those losses were due to procedural reasons—like missed paperwork or system glitches—not because they were ineligible. The story of Pennsylvania’s Medicaid unwinding isn’t hypothetical; it’s a preview of what’s been made policy throughout the country. The new federal work requirement would recreate that kind of failure at scale, both permanently and by design. For every single person pushed off Medicaid, the administrative burdens they face leading to their coverage loss not only harm families far beyond the individual—they also waste taxpayer money. 

Medicaid in Pennsylvania doesn’t currently have work-reporting requirements. However, under a 2018 bill passed by the state legislature—before being vetoed by Governor Tom Wolf—the administrative cost of processing a single disenrollment due to work-reporting rules was estimated upwards of $5,000 per case; a figure nearly equal to what Medicaid spends per person per year on actual care. In 2019, Pennsylvania spent $9,642 per enrollee, the fifth-highest in the nation. The proposal’s total implementation costs were projected at $600 to $700 million annually, including the hiring of 300 new staff—figures widely criticized as excessive given the state’s salary and benefit structure.

That’s the real danger. The law (as passed, but not yet implemented) doesn’t save money or even protect Medicaid—rather it offloads the burden of staying insured onto poor people, counting on them to fail. And when they (10 million) do, they lose coverage—not even necessarily for being ineligible, but for missing a step. The result? Delayed care, mounting debt, and, according to estimates, an additional 50,000 preventable deaths each year. What should a hospital say to a patient who’s being discharged not because they’re stable, but instead because they’ve lost eligibility and there’s nowhere else for them to go? What should a home health worker say to a family who just lost home health aide coverage and must now quit a job to provide care?

The true loss facilitated by this law extends far beyond individual households—hospitals will now absorb more unreimbursed care, rural providers will now face new financial pressures, and beds for acute care will now be tied up with patients who have no safe discharge plan. Accordingly, public health systems will continually strain under this new demand as people cycle in and out of eligibility. How are providers supposed to plan for continuity of care when insurance becomes conditional, even unpredictable, from week to week? What happens when long-term patients show up at the ER with nowhere else to go?

This isn’t about work. It’s about designing a system to push people out—then blaming them for disappearing. Medicaid doesn’t need surveillance, it needs stability. An effective safety net should not punish people for being poor—or set them up to fail so that someone else can claim savings. We must recognize that the burden here is not just economic—it’s fundamentally moral. And if policymakers won’t acknowledge that, providers and communities will be left to pick up the pieces.

Key Takeaways for People with HIV

For People with HIV, especially those long-term survivors, and anyone managing chronic or complex health conditions, these changes aren’t only policy shifts; for them, disruptions can be life-threatening. Medicaid has long been a lifeline for accessing and maintaining HIV care (in fact, over 42% of all PWH rely on it), along with medications, home health services, stable case management, and others! 

Turning access into a conditional, paperwork-based process means that even short-term lapses and “churn”—like missed forms, outdated logins, or an unstable internet connection—can unravel years of treatment progress. And for older adults already juggling multiple providers and medications, this adds yet another administrative hurdle to manage to retain care. Even for those supported by Title XIX-funded targeted case management, the burden remains very real. 

No one should lose their healthcare because they failed to complete an online form. But under this law, that’s not an accident, it’s the plan.