Implementing H.R.1 Work Requirements: The Medical Frailty Exemption

KEY TAKEAWAYS:

  • In January of 2027, adults ages 19–64 covered under the ACA Medicaid expansion in Illinois will need to start meeting a work requirement to keep their health coverage due to changes enacted by the H.R.1 ‘One Big Beautiful Bill Act’. People with disabling medical conditions will be exempt. 
  • “Medical Frailty” is a legal concept used in H.R.1 to define the medical requirements someone must meet to get a work requirement exemption. States currently have substantial discretion to define Medical Frailty. State Medicaid agencies will likely play a significant role in deciding which medical conditions will qualify someone for a medical exemption and which will not.
  • Illinois can make it easier for individuals with disabilities to retain Medicaid coverage and/or enroll in ACA Medicaid if they opt for a broader definition of Medical Frailty.
  • Illinois can also consider developing systems that will help people with disabling medical conditions get approved for a medical exemption from work requirements. They can:
    1. Pull from existing data to automatically exempt current Medicaid recipients that already meet medical frailty requirements.
    2. Allow people to self-attest Medical Frailty on a Medicaid application and invest in human-centered communication tactics.

IMPLEMENTING H.R.1 WORK REQUIREMENTS: THE MEDICAL FRAILTY EXEMPTION

On July 4, 2025, the Trump administration enacted H.R.1(the One Big Beautiful Bill Act), introducing mandatory work requirements for adults enrolled in Medicaid through the ACA  expansion. Beginning in January 2027, Illinois adults ages 19–64 currently covered under the ACA Medicaid expansion must work at least 80 hours per month to maintain Medicaid coverage, unless they qualify for an exemption. Health related exemptions will play a central role in determining who retains access to Medicaid.

The legislation presents a complex technical challenge , as the parameters of the work requirement obligate many states to completely re-haul their existing eligibility and reporting systems with minimal guidance or support from the federal government. Strong medical exemption screening systems will require complex designs. If the medical exemption isn’t implemented carefully, many eligible beneficiaries will be at risk of losing coverage due to additional layers of red tape and churn.

MEDICAL FRAILTY

Medical Frailty is a legal concept employed in H.R.1 that  dates back to the Deficit Reduction Act of 2005. The term essentially defines who can qualify for a medical exemption from work requirements. According to H.R.1, people are considered ‘medically frail’ if they:

  • Are blind or meet the Social Security Administration’s definition of disability OR
  • Have a substance use disorder
  • Have a disabling mental disorder
  • Have a significant physical, intellectual, or developmental disability that impairs Activities of Daily Living
  • Have a serious or complex medical condition

Many details are omitted from this definition; historically, the Center for Medicare and Medicaid Services (CMS) has deferred to states to define the specifics themselves. For example, states have traditionally been given leeway to decide what specifically constitutes a ‘serious or complex medical condition’ or what they will consider a ‘disabling mental disorder’.  While it is possible CMS will expand further details and requirements for this existing  Medical Frailty definition when they announce the final interim rule on Medicaid work requirements on June 1, 2026, policy experts are presuming that states will be able to keep these flexibilities . With this in mind, careful state-wide medical frailty policies may be the key to helping people retain their ACA Medicaid health coverage.  This could be especially valuable for individuals applying for Social Security Disability as they wait for the benefit to be approved.

States that opt for inclusive definitions of Medical Frailty can potentially help large numbers of beneficiaries retain their Medicaid coverage. Investments in systems that make medical frailty data easy to gather may be one of the best tools at Illinois’ disposal to help mitigate the harm that could be caused by this bill. “States have flexibility to define which diagnoses and types of services fall within these [medical frailty] categories,” write health policy specialists Patti Boozang and Kindra Serafi in the blog  The 80 Million,  “It’s essential that they do so within a framework that is operationally feasible, data-driven, and ensures applicants and enrollees are able to access the pathways to exemption if they are eligible.”

A variety of policy experts have recently published guidelines to help states operationalize Medical Frailty.  Below is a highlight of some recommendations:

1. Develop an inclusive definition of Medical Frailty

Definitions of Medical Frailty should encompass a full range of health conditions and functional impairments. Formal diagnoses should not be required, considering that health insurance is often a prerequisite for someone to obtain one. However, diagnoses can and should be used to assist in making medical frailty determinations. States can develop medical frailty definitions that allow beneficiaries to self-attest medical conditions; this can help gather real time data relating to individuals’ hospitalizations and/or specific medical circumstances.

2. Leverage existing data to help identify medically frail individuals. Link that data to eligibility and enrollment systems.

A variety of existing data sources can be used to help automatically apply the medical frailty exemption for existing Medicaid enrollees with disabling medical conditions.  Medicaid Management Information System (MMIS), Managed Care Organization (MCO), and Health and Human Service Agency data can be leveraged to help apply the exemption to eligible beneficiaries. States can also consider developing coding systems and specialized algorithms that use diagnostic and service utilization data to identify individuals who meet the medical frailty criteria.

The Center on Budget and Policy Priorities notes that states should carefully consider  their choice of technology vendors. A vendor that can appropriately support system changes and other state needs will help  avoid the risk of long term consequences and high costs  in the future due to failure to appropriately identify medically frail individuals.

Potential data sources:

  • Medicaid Management Information System (MMIS):

MMIS is a Medicaid data system that holds claim encounter data. This data includes diagnosis and procedure code information, which can be used to help identify people in the system who will qualify for the medical frailty exemption. State Health and Value Systems (SVHS), a research group run out of Princeton University, suggests that states develop a coding system to “conduct MMIS-based claims and encounter analytics to systematically flag individuals who meet exemption criteria.”

  • Managed Care Organizations (MCOs):

MCOs were instrumental in the success of the Medicaid Unwinding Period.  Medicaid agencies can pull from some of these practices to help identify medically frail beneficiaries.  MCO claims data and care management data sets should have information needed that can help Medicaid beneficiaries meet the exemption.  MCOs can also develop screeners to help identify beneficiaries who may be eligible for the work requirement exemption.  States can put timeliness requirements for MCO reporting if they are not in place already, to confirm all data pulled is accurate.

  • Health and Human Services Agencies:

States can identify select state-funded programs where all participants should meet the clinical or functional criteria for medical frailty requirements. Substance use treatment programs, community mental health programs, and programs for individuals with intellectual and developmental disabilities have all been identified as potential programs where medical frailty requirements could be automated for all participants. States can design a system that pulls from program enrollment data and automates medical frailty exemptions for all participants in these types of programs.

3. Allow new Medicaid applicants to self-attest Medical Frailty.

While the above data sources will help current Medicaid recipients, self-attestation is an important feature for states to consider offering new Medicaid enrollees. Self-attestation can serve as a safeguard that prevents uninsured applicants from getting placed in a predicament where they are unable to get a medical frailty designation because they are without health coverage. States can opt to utilize  human-centered communication approaches when designing the self attestation process. Human-centered communication is an evidence-based approach that has been shown to prevent churn and reduce processing times. Some person-centered approaches to consider include adapting application and documentation for mobile phones and utilizing person centered form design.

CONCLUSION

As Illinois prepares to implement H.R.1’s work requirements, the definition and operationalization of Medical Frailty will be one of the most consequential policy decisions the state makes. While federal law mandates the work requirement, it leaves critical discretion to states in determining who qualifies for a medical exemption and how that exemption is administered. Thoughtful, inclusive policy design—paired with strong data integration, automatic exemptions where possible, self-attestation pathways, and human-centered communication—can significantly reduce unnecessary coverage loss among people with disabling health conditions.

Medical frailty policy will not simply determine administrative processes; it will determine whether thousands of Illinois residents with serious health needs retain access to care. The choices Illinois makes now will shape whether this new requirement functions as a narrow gate—or a safeguard that protects those it was intended to exempt.

REFERENCES/ FURTHER READING:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Posted on February 26, 2026

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