CMS released preliminary guidance on H.R. 1’s mandatory Medicaid work requirements on December 8. The much anticipated guidance fell far short of answering all the questions states need answered but it did acknowledge that implementing the Medicaid work reporting requirements mandated by the One Big Beautiful Bill (H.R. 1) will be a “serious undertaking for states that will require policy, operational, and system changes”. H.R. 1 required CMS to issue regulations by June of 2026 leaving a scant six months for states to rejigger their eligibility systems for one of the most complicated policies they will have to administer. Hence expectations were high for some meat on the bones now.
That is an extremely heavy lift on a very short deadline that gets shorter by the day. One Medicaid Director compared the process to having to the fly the plane as we build it. This burden is on top of many other challenges facing states such as, how to make up for the loss of federal Medicaid funding due to other provisions of H.R. 1. Moreover, the complexity of the many exemptions and the need to start educating communities and providers with clear guidance on the who, what, when and how is crucial to avoid even larger coverage losses than we are expecting. (A reminder that the Congressional Budget Office estimated that 5.2 million people would lose Medicaid and become uninsured because of the new work reporting requirements.).
CMS has not yet been able to answer a very simple question – which states do work reporting requirements apply to? The guidance notes that some states that have Section 1115 demonstration waivers for adult expansions may have to comply but says further guidance is forthcoming on which ones.
There were a few interesting nuggets in the guidance although most of it simply restates the statutory language. The section on notification requirements explains that states must alert Medicaid expansion enrollees about the new work reporting requirements by mail (or in electronic format, if elected by individuals) and one other format in a timely manner. It does not specify what second mode of communications should be but mentions, among other options, “an internet website, other commonly available electronic means, and other formats the Secretary determines appropriate.” Posting a notice about the new work reporting requirements on a website is a passive way to deliver the information people need so they don’t inappropriately lose their health coverage. As we know from the recent experience of Medicaid unwinding when many eligible people lost their coverage, many enrollees will not get the letter or open the mail; so to imagine that of their own accord they will be checking the state’s website is absurd. States will need to make a much more serious effort to reach people eligible for Medicaid expansion coverage and help them figure out how to comply with the new law. We know from the unwinding process that in order to keep eligible people enrolled in Medicaid coverage, states must engage in vigorous, multimodal communications that try to reach people multiple times through a variety of formats including text, e-mail and phone.
The guidance also lays out the timeline for the state outreach. The timeline makes clear that the attempt to keep the looming coverage losses out of the public view until after the midterm elections will not be entirely successful. States must start notifying people enrolled in Medicaid expansion coverage about the new restrictions beginning by September at the latest. States wishing to require longer periods of work and community engagement prior to renewal will have to initiate outreach earlier in the summer of 2026. This is an insufficient timeline given the complexity of the new administrative burdens but it follows the minimum notification requirement included in the statute.
There are some slivers of good news in this guidance including clarification that if an individual successfully reports compliance with the work reporting requirement during the renewal review period for the requisite number of months (one to three as determined by the state), the state cannot dictate which months those are.
CMS said it is developing the interim final rule and will provide additional guidance focusing on topics such as the use of reliable information, the role of Managed Care Organizations and six-month redeterminations.
As we’ve blogged about many times, work reporting requirements will not support work but they will cause people who desperately need to have access to health insurance to lose it. The goal for CMS and state Medicaid agencies should be to ensure that eligible people do not lose their health coverage due to red tape barriers. Losing health coverage impacts health, leads to greater medical debt and provides less financial security for the whole family. Many of those covered through Medicaid expansion are parents and research shows that the expansion of Medicaid to adults created a “welcome mat” effect for children. When parents lose coverage due to ineffective communications efforts and onerous new administrative barriers, children are likely to become uninsured too. We call that the “unwelcome mat” effect. CMS should require states to do very clear communications campaigns to states that parents with children under 14 are not impacted and under no circumstances should their children be impacted.