Beginning January 1, 2027, OBBBA requires adults covered under the Medicaid expansion population to participate in mandatory work activities or show they are exempt. These work requirements will force Medicaid beneficiaries to show that they participate in one or more required work-related activities for 80 hours per month. Activities can include: working at a paid job; participating in work programs (including SNAP); performing community service; and enrolling in an educational program (career, technical, or higher education). Certain individuals are either excluded or meet an exception from Medicaid work requirements, and states have the option to exempt individuals for good cause for four additional reasons. This provision of OBBBA will not help low-income people to find jobs. Research shows that the vast majority of Medicaid enrollees who are able to work already do. Rather, the work requirements will end health insurance coverage for millions – by some estimates, over 5 million people will lose Medicaid as a result of the work requirements.
In the next year, states will have to take a number of policy and logistical steps to implement the work requirements. Making the process of verifying compliance as easy as possible will be key to reducing the number of low-income people who lose health coverage as a result of the requirements. States should also look to their existing partners to help them maximize retention of people in their Medicaid program and to assist eligible applicants to enroll. In many states, that could mean working with Medicaid Managed Care plans to serve as an information conduit between their members and the state.
OBBBA expressly prohibits states from contracting with certain entities, including Medicaid Managed Care Plans, “to determine beneficiary compliance.” This prohibition aim to prevent conflicts of interest, given the financial incentive for Medicaid Managed Care plans to keep people enrolled in Medicaid. However, even though Medicaid Managed Care plans cannot be the final arbiters of whether a beneficiary has complied with work requirements, this same financial incentive means that Medicaid Managed Care plans can be important allies in efforts to ensure that eligible Medicaid beneficiaries do not lose their coverage (or fail to enroll) due to bureaucratic hurdles created by the new work requirement.
In addition, when states restarted Medicaid eligibility redeterminations that had been suspended during the COVID Public Health Emergency, many states worked closely with Medicaid Managed Care plans to help eligible beneficiaries maintain their coverage. For example, Medicaid Managed Care plans in many states played a key role in educating their members about the steps they needed to take to renew their Medicaid coverage to stay enrolled, and in providing updated contact information for members to the state. States and advocates can learn from the partnerships forged in the unwinding to leverage Medicaid Managed Care plans’ relationship with their members to ease the burden on beneficiaries to show compliance with the new work requirements.
For one, Medicaid Managed Care plans can assist with outreach to Medicaid beneficiaries about the new requirements. The law requires states to conduct outreach to beneficiaries between June and August of 2026, and the need for outreach will be ongoing. During the PHE Unwinding, Medicaid Managed Care plans helped inform their enrollees about the need to update their contact information and reminded them about completing the eligibility renewal process, which may have been new to people who enrolled after the PHE began. Similarly, plans can work with states to inform beneficiaries about the process to comply with, or obtain an exemption from, the new work requirements. States should begin working with plans now to develop outreach campaigns.
Plans will also be a key partner in helping states to identify members who are potentially eligible for an exception or exemption from the work requirements. For example. Managed Care plans will often have the most up-to-date data to identify members who are pregnant or recently post-partum, who qualify as “medically frail,” or who are participating in qualifying substance use disorder treatment. States should start work now to put into place mechanisms for Medicaid Managed Care plans to share data to identify members who should not be subject to work requirements.
Work requirements will make it harder for low-income people to obtain and maintain their eligibility for Medicaid. It is important that states make the compliance process as accessible as possible to ensure that people do not lose coverage only because the bureaucratic process of compliance is burdensome. In many states, partnering with Medicaid Managed Care plans can simplify the process of informing Medicaid beneficiaries about work requirements as well as the process of showing compliance or eligibility for an exception or exemption. The statutory restrictions should not pose a big obstacle to cooperation. Given the short time before work requirements are effective in 2027, states should begin working with their Medicaid Managed Care plans now to reduce the burden on work requirements on beneficiaries.
