Taya Hailstone, a 19-year-old in remission from Hodgkin lymphoma for five years, faced loss of her low-cost Medicaid disability coverage after Montana’s health department determined she no longer qualified. The state made this determination after learning she had ceased receiving Social Security disability payments, which she had done hoping to achieve sufficient health improvement to work and accumulate savings beyond the strict income limits attached to those benefits. However, Hailstone’s health remains variable, and she stated she is currently unable to work consistently. The state’s decision came without consulting medical records from her treatment team, according to correspondence reviewed by KFF Health News. Hailstone was shifted to the state’s Children’s Health Insurance Program three months before aging out of it, and she has maintained Medicaid coverage during an ongoing appeal.
Hailstone’s case reflects broader challenges within the disability benefits system as new federal Medicaid work requirements take effect. An estimated 18.5 million people will need to demonstrate they are working, attending school, or volunteering to maintain Medicaid coverage, with more than 40% of those enrollees living with chronic health conditions. Congress provided states until January 2027 to implement these requirements, though some states including Montana began earlier. The law permits exemptions for those deemed “medically frail,” but federal officials expanded requirements beyond congressional intent by also mandating proof that illness prevents work. According to the Congressional Budget Office, more than 5 million people are projected to lose coverage by 2034 due to these requirements.
Advocates and legal experts have raised concerns that states lack adequate resources and systems to fairly assess medical exemptions. The federal government allocated $200 million total for states to implement work requirements, compared to the Social Security Administration’s annual expenditure of more than $5 billion administering its own disability program to roughly 7 million people. In June, 25 states sued the Trump administration over the medical frailty assessment standards. Hailstone’s case represents what advocates predict will become a widespread pattern of denials through an opaque process affecting millions of people with disabilities seeking to maintain coverage.
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