The Trump administration gave the approval Friday.
People between the ages of 19 and 64 must complete 80 hours per month of "community engagement" to keep their benefits. That includes getting a job, going to school, taking a job training course and community service.
Republican Gov. Matt Bevin says the plan will save state taxpayers more than $300 million over the next five years. He also estimates about 95,000 people will lose their Medicaid coverage either by not complying with the work and community engagement requirements, or by losing their eligibility because they make too much money.