Crucial Medicaid Coverage for Family Caregivers at Risk

AARP urges states, federal government to make sure caregivers are exempt from new work requirements

Miriam Cross,

AARP

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Published April 01, 2026

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Key takeaways

Millions of family caregivers rely on Medicaid for their health coverage but may face new work rules starting in 2027.
The law exempts some caregivers, but many others remain uncertain about whether they will qualify.
AARP urges clear exemptions and simple verification procedures so caregivers do not lose their health insurance.

Family caregiving can be a full-time job without a salary. That makes Medicaid vital for those who gave up day jobs with steady incomes and benefits to assist loved ones with daily tasks like bathing, dressing and housework that they couldn't do on their own.

Of the 63 million family caregivers in the U.S., 7.3 million are adults ages 18 to 64 who rely on Medicaid for their health coverage, according to AARP and the National Alliance for Caregiving’s Caregiving in the US 2025 report. But the One Big Beautiful Bill Act (OBBA), signed into law in 2025, imposes new work requirements on enrollees as one of several cuts it made to health care programs.

Two categories of caregivers were specifically exempt from the Medicaid work requirements law: parents, guardians and others caring for dependent children, and those caring for people with disabilities.

That leaves millions of people in the broader universe of caregivers uncertain about what will happen to the program they rely on for their health insurance when new work requirements kick in. Starting in January 2027 — and potentially earlier in some states — Medicaid enrollees between the ages of 19 and 64 must prove they are employed, volunteering or enrolled in school for at least 80 hours per month to keep their coverage.

“Caregiving is a huge burden on people,” says Ellen Andrews, executive director of the Connecticut Health Policy Project, a nonprofit research and educational organization. “It keeps them from working, so their income is lower and Medicaid is critical.”

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AARP is pressing federal and state governments to make it clear that family caregivers as defined in federal law are exempt from meeting Medicaid work requirements. At the same time, we are urging state Medicaid directors, governors and legislators to make the work-verification process as seamless as possible, so no caregiver loses coverage for administrative reasons.

States can potentially use existing data such as hospital discharge paperwork or caregiver-related tax filings to identify caregivers, or ask them to simply attest to their status rather than making them navigate a complex online system and find documentation to prove it.

“If family caregivers have to go back into the workforce, what does that mean for the folks receiving care?” says Anna Doroghazi, a government affairs director at AARP.

Who counts as a caregiver?

Although the OBBA mentions only two categories of caregivers specifically by name, it references the RAISE Family Caregivers Act, noting that a Medicaid enrollee “who is the parent, guardian, caretaker relative, or family caregiver (as defined in section 2 of the RAISE Family Caregivers Act) of a dependent child 13 years of age and under or a disabled individual” is exempt from the work requirements.

The RAISE Family Caregivers Act defines “family caregivers” as an adult family member or other person who provides assistance to someone with chronic or other health conditions, disabilities or functional limitations. President Donald Trump signed the AARP-backed bill into law during his first term.

Because the 2025 law cites the RAISE definition of “family caregiver,” Doroghazi says, AARP urges that the federal Centers for Medicare & Medicaid Services (CMS) and state governments use that standard rather than restricting exemptions to caregivers for children and loved ones with disabilities.

Otherwise, family caregivers who fall outside the two specified categories, such as those caring for people with a chronic illness, may be forced to navigate complex systems and paperwork to log 80 hours of work or volunteering per month to keep their Medicaid coverage. That may leave their loved one with no one to help them and no choice but to enter a costly nursing home.

Even beyond the human toll, “that’s a lot more expensive for taxpayers,” Andrews points out. The economic value of family caregiving is more than $1 trillion, according to a new report from the AARP Public Policy Institute. That is more than all federal, state and local Medicaid spending in 2024, which totaled $931.7 billion.

A caregiver may also risk going without health insurance, even though caregiving work can be both physically and emotionally stressful.

“That’s not a gamble we want people to take,” Doroghazi says.

Time is running out

The situation is already playing out in some states, including Nebraska, which is aiming to be the first in the country to implement the new Medicaid work requirements. Its launch date is May 1.

In early January, AARP Nebraska wrote to the state health department expressing concerns and has met regularly with officials to press for a broad definition of “caregivers” as well as a simple verification process, says Jina Ragland, senior associate state director of advocacy and outreach at AARP Nebraska. So far, there’s been no definitive action.

“They keep saying, ‘We don’t know yet,’ ” Ragland says.

AARP Montana began pushing for a broad definition of “caregiver” in the summer of 2025 and is doubling down on its efforts in 2026. The state plans to enforce Medicaid work requirements by July 1. But AARP Montana is encouraging Montana’s health department to wait until the January 2027 deadline and focus instead on rolling out the $234 million in funds it received as part of the Rural Health Transformation Program, a grant system the federal government created last year to support rural health care initiatives.

While the state has not announced any changes in its plan, “it’s important that we and other stakeholders get on the record warning [the state] of what’s to come if we don’t address this,” says Kristin Page-Nei, associate state director of advocacy and outreach for AARP Montana.

Ultimately, states will look to CMS, the agency overseeing these changes, for guidance. That’s why AARP is addressing the issue on the federal level as well:

In November, AARP urged CMS to make clear that all family caregivers are exempt from meeting the new Medicaid conditions.
In February, we joined members of the Caregiver Nation Coalition, a network of aging, disability, patient advocacy and caregiving organizations, in a letter to CMS making the same case.
We shared with CMS a January report from the AARP Public Policy Institute that outlines a dozen different data sources states could use to identify family caregivers and recommends other tools to ensure no caregiver who relies on Medicaid falls through the cracks. AARP also shared the new report on the economic value of caregiving with CMS.

Alice Burns, associate director of the Program on Medicaid and the Uninsured at health policy research and polling organization KFF, points out that many caregivers are already working or in school. But if they have trouble completing the required paperwork or documenting their role as a caregiver, they may temporarily lose their coverage all the same.

“Family caregivers are stretched so thin already,” Burns says. “Many of them have difficulty making their own medical appointments because so many things are competing for their time.”

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The key takeaways were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.

Miriam Cross is a writer for AARP covering advocacy issues. She previously worked at American Banker and Kiplinger’s Personal Finance.