Starting January 1, 2027, Illinois will enforce a new rule for adults in its Medicaid expansion program. Participants must either prove they worked 80 hours in the last month or demonstrate they are too unwell to work. This requirement primarily relies on billing codes to determine a person’s health status. For instance, if a woman is between an abnormal mammogram and a confirmed diagnosis, billing codes might not reflect her true medical condition. While Congress mandated this rule, states decide its implementation. A key challenge is identifying from claims data who is too sick to work.
On July 30, a federal judge opted not to pause this rule amidst a multistate challenge. States are actively developing systems to comply, and Illinois highlights the potential risks if these systems fail. The law exempts individuals classified as ‘medically frail.’ This category includes those whose conditions genuinely prevent work, such as during cancer treatment. However, identifying qualified patients remains problematic. Illinois plans to depend on claims data, which typically includes billing codes generated during care. While effective for ongoing treatments like chemotherapy, these codes fall short at the start and end phases of a diagnosis and treatment journey.
An abnormal mammogram precedes a formal diagnosis. Before malignancy confirmation via pathology, various imaging tests, biopsies, and specialist consultations occur. The cancer code is assigned only at the process’s conclusion. Until then, records only list fragmented screenings and follow-ups. While the patient seeks to confirm if an anomaly is cancerous, an absence of a confirmed diagnosis can lead the system to deny Medicaid renewal. The system interprets the lack of code as a lack of serious condition. Thus, she may not qualify for an exemption.
A critical issue arises from Illinois’s coverage policies. Although the state covers breast and cervical cancer treatment through a separate Medicaid category, existing Medicaid recipients don’t transition into this category upon diagnosis. Hence, individuals already on Medicaid remain in the expansion group, subject to work requirements, throughout surgery and chemotherapy treatments.
Arkansas previously experimented with such a requirement. During the initial seven months of its 2018 work mandate, about 18,000 people lost coverage. Employment rates did not increase, as reported by the New England Journal of Medicine. People lost access primarily due to the complexity of reporting, not lack of work.
The federal law is unchanged, but states have varying implementation strategies, such as screening for medical frailty at application, creating hardship exemptions, and extending compliance periods. Illinois must decide the burden of proof carefully. Effective protections may involve shielding patients from proving illness during diagnostic phases, offering grace periods between diagnosis and claim updates, accepting documentation from clinics not billing Medicaid, and maintaining coverage for patients under ongoing monitoring. These measures are within state control and do not alter federal law.
The Centers for Medicare and Medicaid Services estimates that 2.3 million people will lose Medicaid in the first year. No legislative action in Springfield will change the federal rule, but state officials will soon determine which diagnoses qualify for exemptions, when exemptions start, and the required proof patients must provide to prove illness. Cancer progression does not wait for billing codes; states should not either when defining illness proof.
Akshaya Sahasra Ganji is an undergraduate health policy researcher at Florida International University, focusing on women’s health, neuroscience, and health policy.