As the new Medicaid work requirements loom, states are facing a daunting challenge. With millions of beneficiaries impacted, the rapid implementation of these regulations may prove difficult and costly for state governments already stretched thin.
The 2027 law stipulates that able-bodied adults must meet specific work requirements to maintain Medicaid coverage. However, states are now under pressure to develop systems capable of verifying compliance, which many experts say could lead to complications and administrative failures.
Tight Timelines and High Costs for States
According to Medicaid experts, the short time frame for rolling out the new requirements is a significant burden.
Starting in 2027, the law will require Medicaid recipients to prove they are working, volunteering, or participating in other qualifying activities for at least 80 hours a month. This is a major logistical hurdle for states, many of which struggle with outdated Medicaid systems.
For instance, Georgia spent nearly $100 million on a previous attempt to implement work rules, with $55 million going toward building a verification system. Despite the substantial expenditure, Georgia managed to enroll only a fraction of those eligible.
It cost the state an average of $13,000 per person just to process applications. These high implementation costs are a warning for other states, which could face similar challenges.
The new law includes $200 million in funding for states to implement the changes. However, experts argue this amount is unlikely to cover the full administrative, operational, and communication costs involved.
The reality is that many states will rely on outside contractors, such as Deloitte and Accenture, to set up the necessary systems. However, this approach is far from foolproof. Experts predict that technical glitches, such as system crashes, will likely delay implementation and add to the confusion.
Risks of Red Tape and Inaccurate Data
One of the key challenges of the new Medicaid work rules is determining eligibility, especially for individuals who have fluctuating work hours, like gig workers, or those with health issues that could qualify them for exemptions.
For example, the law allows carve-outs for individuals with disabling mental disorders or severe medical conditions, but the specifics are yet to be determined.
States will also need to verify recipients’ compliance with the work requirement each month and conduct biannual redeterminations. The reliance on accurate data is essential, but the systems required to track this information may not be up to the task.
Previous attempts, such as those in Georgia and Arkansas, have been marred by backlogs, conflicting information, and technical issues, leading to confusion among recipients and delays in coverage.
Medicaid experts warn that these complications could lead to significant coverage losses, particularly for those who may be eligible but fail to meet the administrative requirements. “There is no way to stop people who should be eligible from losing coverage,” said Kevin De Liban, a former director of advocacy for Legal Aid of Arkansas.
