WASHINGTON (Reuters) - Kentucky on Friday became the first U.S. state to require that Medicaid recipients work or get jobs training, after gaining federal approval for the fundamental change to the 50-year-old health insurance program for the poor.

The Centers for Medicare and Medicaid Services issued policy guidance on Thursday allowing states to design and propose test programs with such requirements.

Kentucky’s waiver, submitted for federal approval in 2016, requires able-bodied adult recipients to participate in at least 80 hours a month of “employment activities,” including jobs training, education and community service.

The Kentucky program also imposes a premium on most Medicaid recipients based on income. Some who miss a payment or fail to re-enroll will be locked out for six months. The new rules will take effect in July, Kentucky state officials said.

“Kentucky will now lead on this issue,” Governor Matt Bevin said at a news conference on Friday. “They want the dignity associated with being able to earn and have engagement in the very things they’re receiving,” he said of Medicaid recipients.

Democrats and health advocacy groups blasted the federal policy on Thursday, saying it would make it tougher for the most vulnerable Americans to have access to healthcare. The Southern Poverty Law Center liberal advocacy group said it planned to file a legal challenge.

The rules apply to those between 19 and 64 years old. Certain groups are exempt, including former foster-care youth, pregnant women, primary caregivers of a dependent, full-time students, the disabled and the medically frail. The Trump administration also said states would have to make “reasonable modifications” for those battling opioid addiction and other substance-use disorders.

Kentucky, along with 30 other states, expanded Medicaid to those earning up to 138 percent of the federal poverty level under the Affordable Care Act, former Democratic President Barack Obama’s signature domestic policy achievement commonly called Obamacare.

More than 400,000 Kentucky residents gained health insurance through the program, the highest growth rate of Medicaid coverage of any state.

Among adult Medicaid recipients aged 18 to 64, 60 percent already have jobs, according to the Kaiser Family Foundation health policy research group. Most adult Medicaid recipients who do not work reported major impediments as the reason, according to Kaiser.

Bevin has said the program had become financially unsustainable under Obamacare, although the federal government covers the majority of its cost. The waiver is projected to reduce the number of people on Medicaid by nearly 86,000 within five years, saving more than $330 million.

At least nine additional states, mostly Republican-led, have proposed similar changes to Medicaid: Arizona, Arkansas, Indiana, Kansas, Maine, New Hampshire, North Carolina, Utah and Wisconsin.