Centene Corporation is the nation’s largest Medicaid managed care company, with nearly 13 million Medicaid enrollees in Q1 2025. At the company’s April 25 earnings call, a financial analyst asked Centene’s CEO about the implications of work reporting requirements for the company’s Medicaid business:
AJ Rice (UBS): “…You also mentioned the work rules which does seem to be something that a lot of these guys are talking about. I wondered, just conceptually, how to think about that—if plans are asked to be the ones that sort of get the attestations about whether people are adhering to the work rule requirements et cetera., how much of a burden would that be? And how impactful would something like that be on the business do you think?”
Here was the CEO’s response:
Sarah London (Centene): “Relative to work requirements you know, these as you know are not new. We have work requirements in some of our states today, we’ve also seen them come and frankly go in our states over the years. And based on that experience, really a lot depends on what the ultimate framework is and the definition of “able-bodied adults,” what the carve-outs are, and so we really would expect a high degree of variability in how and if they settle out at the state level, which again is not new for us, right? We operate in 31 states for Medicaid which means the programs are all different. We’re very used to sort of tracking these changes on the horizon and then working closely with our state partners to understand how they would implement them. And we’ve seen different levels of dependency or expectation relative to MCO’s involvement in that process. We think there’s a great opportunity to lean in there and map out state-by-state ways that we can ensure that members continue to have access to critical health care resources. So our teams are already at work on that process in anticipation of what may or may not come on the work requirements front.”
At the time, the CEO could not have known exactly what version of work reporting requirements would emerge from the budget reconciliation process. Neither could the rest of us: the House Republicans developing the provision were hiding the ball. But with the House passage of the One Beautiful Bill Act on May 22, and issuance of final CBO estimates for the bill on June 4, we now know. Section 44141 of the bill would require the 41 states (including DC) that have taken up Medicaid expansion to impose work reporting requirements on their expansion adults no later than December 31, 2026. As explained by our colleague Allie Gardner at the Center on Budget and Policy Priorities, the House-passed requirements are “one-size-fits-all.” There’s no flexibility for states to determine how to design them—what age range to cover, what reporting to require, what exemptions to grant—much less to decide whether or not to impose them in the first place.
CBO estimates that the provision would reduce the amount the federal government will spend on Medicaid by $344 billion over the next ten years. These federal “savings” will result largely from the loss of Medicaid coverage by expansion adults and the inability of eligible adults to enroll in Medicaid expansion due to red tape barriers. CBO estimates that by 2034, mandatory work reporting requirements will cause Medicaid coverage to decrease by 5.2 million adults, or more than a quarter of the 18.5 million people CBO projects would be subject to the requirements each year. This reflects the proven effectiveness of the administrative barriers inherent in work reporting requirements at causing low-income adults—including those with unstable employment—to lose Medicaid coverage. (For state-specific coverage losses attributable to the House-passed provisions relating to work reporting requirements, six-month eligibility recertifications, and repeal of regulations on eligibility and enrollment, see Manatt Health’s estimates here).
A drop in the number of expansion adults on the order of more than 25 percent is probably not what either the CEOs or the financial analysts of Medicaid managed care companies are looking for. Of the 41 states (including DC) that have taken up Medicaid expansion, all but seven contract with managed care organizations to provide covered services for some or all of their program beneficiaries. By definition, Medicaid MCOs can’t enroll adults who are not enrolled in Medicaid, so a precipitous drop in the number of adults in Medicaid expansion implies a corresponding drop in MCO enrollment. Moreover, since adults would, on paper at least, be exempt if they have a “serious or complex medical condition,” those subject to the reporting requirements could as a group be healthier, and their departure from an MCO’s enrollment for failing to meet those requirements may change the risk profile of an MCO’s remaining enrollees. That, in turn, could lead to a “mismatch” between acuity and capitation rates that would require negotiation between MCOs and state Medicaid agencies.
Last week the Medicaid Health Plans of America (MHPA), which represents 23 managed care companies including Centene, sent a letter to Senate Republican and Democratic leaders. The letter was clear about the implications of the one-size-fits-all mandate for work reporting requirements in the House-passed bill:
We can all agree that work is an effective tool for lifting individuals out of poverty. The House-passed policy of nationwide Medicaid work requirements (referred to as community engagement requirements) strip states of the autonomy to administer their Medicaid programs to best meet the needs of their residents. As Medicaid MCOs, it is our duty to work with states to administer their Medicaid programs as effectively and efficiently as possible, but imposing a federally mandated policy that could create barriers to coverage for those already working or exempt via the legislation forces states, and by extension plans, into a system that may not best serve their residents. Indeed, for the 92% of Medicaid enrollees that are either working parttime or are not working due to caregiving responsibilities, illness or disability, or school attendance, work requirements impose on states and their Medicaid enrollees procedural hurdles to obtaining coverage that could threaten the ability of eligible beneficiaries to receive health care.
What a difference seven weeks makes. Centene and other managed care companies are now publicly acknowledging that, in a one-size-fits-all world, they will not be able to work with states to ensure that their expansion adult enrollees will have access to needed health care because many of those will lose their Medicaid coverage altogether. Not because they are not working; as the MHPA letter emphasizes, the majority of Medicaid adults work full- or part-time. Expansion adults will lose their Medicaid coverage because of the administrative burdens that neither they nor state Medicaid agencies nor the MCOs will be able to solve for.
Hopefully, Senators will consider the MHPA letter and take a different approach. They are, after all, under no obligation to rubber stamp the House provision; to the contrary, their role is to be a check on “improper acts of legislation” from the House. The OBBBA is a classic in the annals of improper bills, and not just because of its Medicaid provisions (although those are bad enough). So this is the Senate’s moment.
Unfortunately, the Senate is not off to a good start. The text released by the Senate Finance Committee on June 16 keeps the House bill’s one-size-fits-all mandate on states to impose work reporting requirements with only a few changes (see section 71124). Some of these make matters worse, like extending the requirements to parents with dependent children older than 14, which increases the risk of coverage loss for those parents and their older children. The bill also prohibits state Medicaid agencies from using MCOs (or any contractors with those MCOs) to “determine beneficiaries’ compliance” with the work reporting requirements.
One change could make the provision a little less damaging (but only in the short run and only in some states): the Secretary would be authorized to exempt a state from complying with the mandate until December 31, 2028 if the state is “demonstrating a good faith effort to comply.” (The effective date is otherwise the quarter beginning January 1, 2027). Of course, the Secretary would be under no obligation to grant any state an exemption; he could, as a practical matter, choose among states seeking exemptions based on alignment with the administration’s policy goals or Red or Blue status. Whether or not exemptions were issued, all expansion states would be subject to the mandate starting January 1, 2029, and coverage losses would begin en masse.
What the MHPA letter underscores is exactly how damaging the House-passed work reporting requirements will be to enrollees, state Medicaid programs, and MCOs. That alone should be cause for correction.