The Five-Year Cutoff: CMS Told People in Long-Term Recovery They May Be Too Recovered to Stay Covered

On the first Monday of June, the Centers for Medicare and Medicaid Services dropped a 247-page interim final rule that most Americans never heard about. It does not name a drug. It does not announce a program. It defines the terms under which people in recovery from substance use disorders can keep their health insurance.

The rule implements the community engagement requirement — bureaucratic shorthand for a work requirement — written into H.R. 1, the One Big Beautiful Bill signed into law on July 4, 2025. Beginning January 1, 2027, certain Medicaid expansion enrollees must document at least 80 hours per month of work, community service, school, or other qualifying activities or lose their coverage. The law carved out an exemption for people who are “medically frail.” CMS, in its June 1 rule, defined what that means. And what it means, for many people in recovery, is significantly less protection than the law’s plain text suggests.

CMS has decided that individuals who have maintained recovery from a substance use disorder for five or more years may no longer qualify for the medical frailty exemption. They face “individualized review.”

What the rule says — and what it doesn’t say about addiction medicine

The One Big Beautiful Bill’s text broadly exempts people who are medically frail, which it defines to include individuals with serious mental illness, disabling mental disorders, and substance use disorders requiring treatment. CMS’s interim final rule narrows this in two critical ways.

First, it places the behavioral health carve-outs inside the medically frail category rather than establishing them as standalone exemptions. That matters because medically frail status requires both a qualifying condition and documented evidence that the condition “significantly impairs” the person’s ability to meet the 80-hour requirement. Having a diagnosis is no longer sufficient. A person with opioid use disorder who is currently enrolled in medication-assisted treatment, working part-time, and attending weekly group therapy — someone whose life is, by any clinical measure, in active recovery — must still demonstrate that their condition specifically impairs their ability to hit 80 hours. If they can hit 80 hours, the exemption may not apply.

Second: the five-year recovery rule. CMS’s rationale, stated directly in the rule’s preamble, is that “the risk of recurrence after five years approaches that of the general population” and that work “can help sustain recovery.” Both claims deserve scrutiny.

The claim about five-year recurrence rates is not wrong — a subset of people with SUD do achieve stable, long-term remission, and the probability of relapse does decrease over time. But “approaches the general population” is doing substantial clinical work in that sentence. Research by Dr. John Kelly at Harvard Medical School and colleagues has consistently found that even people with 5+ years of recovery face higher-than-average risk of recurrence under stress — and the stressors associated with poverty, unstable housing, and sudden coverage loss are precisely the kinds of acute stressors that precede relapse. The five-year mark is not a clinical finish line. The disease does not expire.

The claim that work sustains recovery is supported by evidence — meaningful, structured activity, social connection, and purpose are core elements of long-term recovery. But there is a categorical difference between meaningful engagement and bureaucratic documentation of 80 hours per month. The latter, for many people in recovery, is not the same thing as the former. And for someone whose addiction cost them a decade of work history, consistent documentation represents a skill set they may genuinely be rebuilding, not a trivial paperwork task.

The maze that will lose eligible people

Setting aside the five-year question, the rule’s implementation framework creates a documentation burden that CBPP researchers argue will cost coverage to people who technically qualify for an exemption.

Setting aside the five-year question, the rule’s implementation framework creates a documentation burden that CBPP researchers argue will cost coverage to people who technically qualify for an exemption.

Substance use disorder treatment programs operate under federal confidentiality protections — 42 CFR Part 2 — that strictly limit what treatment providers can share with state Medicaid agencies without explicit patient consent. Verifying someone’s SUD exemption status requires coordinating between clinical programs and eligibility workers in ways that existing data systems are not built to support. The CMS rule does not resolve this tension.

States must implement these requirements by January 1, 2027 — seven months away as of this writing. They have to build eligibility determination systems capable of flagging medically frail exemptions, training caseworkers to evaluate “significant impairment” documentation, and maintaining compliance with both HIPAA and 42 CFR Part 2 simultaneously. The Commonwealth Fund’s analysis notes that states face wildly different administrative capacities for this task. States that have invested in integrated behavioral health data systems may manage. States that haven’t — including several of the highest-overdose states in the country — will struggle.

When states struggle, people fall through. This is not a hypothetical. When Arkansas implemented Medicaid work requirements in 2018 — the only state to do so before courts intervened — roughly 18,000 people lost Medicaid coverage within months. CMS’s own actuarial analysis at the time found that the vast majority lost coverage due to administrative failure, not genuine ineligibility. They qualified for an exemption they never successfully claimed, or they met the work requirement but couldn’t document it correctly, or they simply didn’t receive the right paperwork at the right time.

The population most likely to lose coverage to administrative burden is the population with the most complex needs: people with active SUD, unstable housing, inconsistent access to phones and mail, and difficulty navigating government paperwork. Which is to say, the people the exemption was designed to protect.

The lived-experience logic that the rule ignores

There is a specific piece of the psychology of addiction that the five-year cutoff does not account for: the relationship between health coverage and the decision to seek treatment in the first place.

Medicaid covers approximately one in five adults with a substance use disorder in the United States. For people without employer-sponsored insurance — the overwhelming majority of people who ultimately rely on publicly funded SUD treatment — the availability of Medicaid coverage is not incidental to their treatment decisions. It is often the thing that makes treatment possible at all. Buprenorphine, methadone, residential detox, intensive outpatient programs: none of these are available to people who lose their insurance and cannot pay out of pocket.

The question the rule creates — “Am I still sick enough to be covered?” — is, for many people in recovery, a psychologically dangerous question. Recovery is not a linear progression toward a stable endpoint. It is a process that includes, for most people, periods of struggle. Asking someone to prove they are impaired enough to warrant protection while simultaneously trying to sustain recovery is a cognitive trap that the rule does not acknowledge and the policy apparatus has no mechanism to address.

KFF’s analysis of work requirements and behavioral health identifies concentration difficulties, energy fluctuations, anxiety, and difficulty managing overwhelm as common symptoms that make documentation especially challenging. These are the same symptoms that make employment complicated. They are also the same symptoms that make navigating a monthly reporting requirement complicated. The policy solution to this problem — more documentation — is itself an obstacle for the people it’s meant to exempt.

What Arizona providers are watching

This story plays out differently state by state, and Arizona illustrates the particular stakes. Arizona is a Medicaid expansion state through AHCCCS, and the vast majority of publicly funded SUD treatment in the state runs through AHCCCS or AHCCCS-funded programs. Arizona already ranks 49th out of 51 for behavioral health access. It is one of the seven states where overdose deaths increased in 2025 even as the national trend improved. Fewer than one in twenty Arizonans with opioid use disorder receives medication-assisted treatment.

It is one of the seven states where overdose deaths increased in 2025 even as the national trend improved.

The SOR IV grant — $34.8 million over three years from SAMHSA — funds much of the infrastructure connecting Arizonans to treatment. That infrastructure is already strained. Adding an administrative layer that requires treatment programs to verify clients’ exemption status, coordinate documentation with AHCCCS, and manage consent under 42 CFR Part 2 will consume bandwidth that was previously dedicated to clinical care.

Arizona providers have until July 31, 2026, to submit comments on the interim final rule to CMS. Organizations including AHCCCS, the Arizona Association of Providers for People with Disabilities, and the Maricopa County behavioral health network have all signaled they are preparing responses. Whether those comments will change the rule before January 2027 is uncertain.

What the five-year cutoff means, in practice

Here is what the timeline looks like for a person in recovery in an expansion state who entered treatment in late 2020 and has been in continuous, documented recovery since. They are now — in June 2026 — approaching five years. They work sporadically, still in the process of rebuilding an employment history the addiction made impossible to maintain. They are on Medicaid. Their MAT prescriber, their counselor, and their peer support specialist are all Medicaid-funded.

Under the June 1 rule, they will now face “individualized review” when they apply for the medically frail exemption. The review will assess whether their SUD “significantly impairs” their ability to meet an 80-hour monthly work requirement. If they demonstrate they can work 80 hours — which some months they can — they may not qualify for the exemption. If they lose coverage, they lose the MAT prescription. If they lose the MAT prescription, they lose one of the most important protective factors in their recovery.

The CMS rule was issued June 1. Comments are due July 31. Implementation begins January 1, 2027. Somewhere in there, the question of what “five years of stable recovery” means for a disease characterized by remission and relapse will need to be resolved — either by CMS in the final rule, by litigation, or, eventually, by whatever happens to the people who fall through.

The Rize newsroom will track Arizona implementation specifically. For treatment providers and case managers navigating these changes now, CBPP’s implementation guide and the CMS fact sheet on exemption categories are the most current resources. For people in recovery in Arizona: nothing changes before January 1, 2027. Your coverage is intact today.