Taya Hailstone has been in remission from childhood Hodgkin lymphoma for five years. But the cancer's lasting damage to her organs and nerves can make basic tasks, like loading a dishwasher, hard.
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Still, Montana's health department decided last year that Hailstone is no longer eligible for low-cost disability health coverage through Medicaid. The department switched her coverage to the state's Children's Health Insurance Program, another Medicaid program — three months before she aged out.
Before making the decision, the state didn't seek records from the medical team treating Hailstone, according to letters from those doctors reviewed by KFF Health News. Rather, the administrative ruling came after state officials learned the now-19-year-old had stopped receiving Social Security disability payments. She said she did that because she hoped to get healthy enough to work and save some money — beyond what's allowed under the strict income caps tethered to those payments. But her health changes day to day, and she said for now she's still too sick to consistently work.
Hailstone, who lives with her mom, has been able to keep Medicaid coverage while they appeal the case. She said that without Medicaid she can't afford the treatment to manage the aftermath of her cancer.
"It feels like this process was made to make you give up," Hailstone said.
Patients with disabilities have long struggled with administrative hoops, blunders and confusion when trying to qualify for federally subsidized health coverage because of their illness. Now, new federal Medicaid work requirements mean states face the additional task of deciding who qualifies for a medical exemption. That means reviewing medical cases for an even larger swath of Medicaid enrollees.
Attorneys, researchers and advocates who specialize in public aid said disability cases like Hailstone's — though separate from the incoming work requirements — are an indication that states aren't ready to decide who should be exempt from those requirements. As a result, they said, more people will be denied coverage in an opaque process.
"This will be the story of millions of people," said Anthony Wright, who heads Families USA, a national nonprofit that advocates for ways to make healthcare more accessible.
Jon Ebelt, a spokesperson with the Montana Department of Public Health and Human Services, said the state doesn't comment on individual Medicaid cases.
An estimated 18.5 million people will have to meet the new federal requirements, by proving they're working, going to school, or volunteering to keep their Medicaid coverage, according to the Congressional Budget Office. More than 40% of those enrollees live with a chronic health condition, according to KFF.
Some will be excused from those rules if they can prove they're too sick to work.
More than 5 million people are expected to lose Medicaid coverage by 2034 because of the work requirements, according to the CBO.
Work requirements become law
Many Republican policymakers and the Trump administration have touted Medicaid work requirements to preserve coverage for the neediest. Congress made that national policy through last year's One Big Beautiful Bill Act and gave states until January 2027 to implement work-for-coverage rules.
Some states are starting those checks early. Montana began in July. Nebraska initiated work requirements in May.
In the federal law creating the work requirements, Congress allowed states to exempt people who have an illness that qualifies them as "medically frail." Many states created plans for those judgment calls, only to be surprised when federal officials released rules for the requirements that went beyond what Congress outlined, by also requiring enrollees to prove their illness makes it too hard to work.
Families USA and other organizations have argued the new rules force states to set up a patchwork of systems that, together, would be larger and more complicated than the Social Security Administration's own disability review system. Last year, that federal program cost more than $5 billion to administer to roughly 7 million people nationally. For comparison, Wright said, the federal law provided $200 million for states to share as they implement the work requirements. States are paying contractors millions of dollars to prepare often already flawed public aid systems to meet the new standards.
In June, 25 states sued the Trump administration over the medical frailty rules, arguing they're too hard for patients to meet and for states to assess. That case is ongoing.
Hailstone was diagnosed with blood cancer at age 10. Her intestines tore, which led to their partial removal. As a result, her body struggles to process food and she can face severe dehydration. She said lingering side effects from her cancer treatment can leave her mind foggy and cause her hands and feet to swell enough that it's hard to grip a fork or walk across a room.
Cancer dominated nearly half her life. It left mental scars, too.
"Some days you feel fine and then you suddenly crash," Hailstone said.
Hailstone and her mom live in Roundup, a central Montana town of roughly 2,000 people. They regularly make the nearly two-hour round-trip drive to Billings for specialized care. She typically has three medical appointments a week to see her physical and occupational therapists and a mental health counselor.
Hailstone said she's lucky she has her mother's help navigating Medicaid. Her mom, Kyla Hailstone, said that the state hasn't clearly defined how it determined her daughter's disability status and that its appeal process has been slow and dysfunctional.
Taya Hailstone would qualify for Medicaid based on her income if she can't prove her eligibility for disability coverage. But that would mean proving she's too sick to meet the work requirement — putting her in the same position of having to rely on a state review of her illness.
"If I lose this, this is life-changing," Hailstone said.
"Things fall through the cracks"
Hailstone qualified as disabled through the federal government as recently as 2024, about a year before the state said it was dropping her coverage. State officials can do their own medical review to determine whether someone meets the federal definition of a disability to access Medicaid.
"Whether that happens is always a bit of a crapshoot just based on state capacity," said Megan Dishong, deputy director of the Montana Legal Services Association, which helps low-income people navigate public programs. "Things fall through the cracks."
Ebelt said the state health department accepts disability decisions from the Social Security Administration. The state agency can conduct an internal disability determination if a person doesn't have one from the SSA, but Ebelt said it doesn't have to if a person qualifies for coverage another way.
"We are committed to treating every client with respect and helping those who are eligible receive appropriate Medicaid coverage," Ebelt said.
Montana instituted a three-month grace period for the work requirements. State officials won't begin disenrolling people for noncompliance until October.
Pamela Herd, a University of Michigan social policy professor who has studied bureaucratic obstacles to public benefits, said convoluted disability cases are common enough for attorneys to specialize in accessing aid.
"When we've designed public programs in ways that people can't figure out whether they're eligible without consulting lawyers, we've done something wrong," Herd said. "That has huge, huge implications for what's to come."
Montana officials have said they'll automatically review medical records that could help patients qualify for an exemption. Even so, the federal guidelines released in June mean patients will probably still face additional steps to guarantee an exemption.
Meanwhile, already overstretched doctors worry they'll face the burden of judging whether someone's illness qualifies them for a work exemption.
Dishong said that between now and October, Montana officials could offer more clarity on how the process will work. She said she's worried the state will end up "with a slow-roll mess" instead.
"This is a problem that's just starting," Dishong said.
As for Hailstone, she's now reapplying for Social Security disability payments. That aid would limit how much she can work. But it would also guarantee access to Medicaid.
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