New work reporting requirement rule could result in massive Medicaid coverage losses for the mental health community
Arlington, VA — Today, the National Alliance on Mental Illness (NAMI) expressed strong concerns about new rules released yesterday on Medicaid community engagement (work reporting) requirements, as required in legislation passed by Congress in 2025. The rules cover how work reporting requirements must be operationalized, including defining exemptions included by Congress in the legislation.
“People with mental illness can thrive when they have access to health care, which Medicaid provides for millions. NAMI advocates have told us time and time again that having Medicaid coverage has enabled them to work,” said Daniel H. Gillison, Jr., CEO of NAMI. “New work reporting requirements put this coverage at risk. Despite Congress insisting that people with mental illness would be protected, these newly released rules break that promise.”
The law, sometimes referred to as the One Big Beautiful Bill Act or the Working Families Tax Cut Act, explicitly recognized that work reporting requirements were not appropriate for all populations and exempted people who are “medically frail,” specifically including a disabling mental disorder as a qualifying condition. Confoundingly, the rules go further than the law, requiring that someone who is medically frail must also prove that their condition impairs their ability to work — an additional requirement that the Administration added only to the medically frail exemption.
Mental illnesses are inherently cyclical, characterized by alternating periods of acute symptoms and relative stability. The experience of living with a mental illness varies over time, with symptoms better managed in some months than others. For example, this means someone who is working while managing major depressive disorder would not receive an exemption until their condition deteriorated to the point of not being able to work, which is also when it would be most challenging for an individual to complete needed paperwork.
NAMI opposed work reporting requirements in last year’s major reconciliation bill (Public Law 119-21) and advocated with the Administration to protect people with mental illness. Late last year, with Legal Action Center, NAMI also released an issue brief on how policymakers should maximize exemptions and minimize burdens for the individual.
“These new rules do not protect people with mental illness and will result in too many people losing access to health care when they need it the most,” said Gillison. “When a person is struggling or faced with a crisis, we want people to be able to get the health care they need, not focus on filling out paperwork. This rule will result in millions of Americans losing their health care because they cannot jump through the right hoops at the right time to prove they are eligible.”
NAMI urges policymakers to make it easier and more affordable for people with mental illness to get and stay healthy — not harder and more expensive.
Visit NAMI’s Medicaid hub to learn more on NAMI’s efforts around Medicaid. To understand why Medicaid work reporting requirements don’t work for people with mental illness, click here.
