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States are bracing for a short timeline to implement Medicaid work requirements that were included in the One Big Beautiful Bill Act, and they'll have their work cut out for them to be ready, according to a new study from KFF.
One big concern for states is that they'll have to make significant changes to eligibility systems to be able to verify compliance with work, school and other qualifying activities.
States have expressed concern over having to make such major system changes in a short timeframe, noting the long lead times typically needed to design, procure and build new systems. Adding to the challenge will be the need to make key system design and workflow decisions before CMS releases guidance, the study found.
Another priority many states mentioned is enhancing capabilities to collect and match data from multiple agencies and external sources, such as claims and enrollment data. States said the data sharing infrastructure is limited, and establishing interfaces to accurately share that data will take time to put in place.
Other policy changes require significant system changes, according to several states, including restrictions on eligibility for lawfully present immigrants, six-month eligibility redeterminations for expansion enrollees and limits to retroactive Medicaid coverage.
Some states also mentioned the challenge of aligning different work requirements across Medicaid, the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families, as well as having to make complex systems and eligibility policy changes for SNAP – changes that may be particularly complicated for states with integrated Medicaid and SNAP eligibility systems, according to the study.
WHAT'S THE IMPACT
States have just over a year to prepare to implement work requirements for the Jan. 1, 2027, deadline and have less than a year before they will need to begin outreach to notify individuals of the new requirements in September 2026. The law directs the Secretary of Health and Human Services to issue an interim final rule on implementing work requirements by June 1, 2026.
This short timeline intensifies the pressure to move quickly with system upgrades, authors said, particularly given the often lengthy vendor procurement process, as well as other factors.
At the same time, several states emphasized the risks of moving forward in the absence of clear guidance, saying that if state decisions are not aligned with the federal expectations, the resulting rework would increase costs and potentially delay meeting important deadlines.
Some states described the implementation deadline as unrealistic, noting that it increases the risk of errors that could lead to unnecessary coverage losses.
Due to these risks, some states said early and clear guidance from CMS would be helpful, especially on issues such as the definition of medical frailty and other exemptions or the permissibility of self-attestation that could affect systems decisions.
Meanwhile, many states said they'll need to hire additional staff or reallocate existing staff to handle increased workloads from verifications, appeals and enrollee outreach. States also anticipate the need for additional staff training, including training staff across departments and agencies, such as SNAP.
Costs are also a concern, with several states saying the increased costs will further strain already constrained state budgets.
THE LARGER TREND
The concerns from states mirror the concerns expressed by Medicaid managed care plans, which were laid out this week in a letter to the Centers for Medicare and Medicaid Services by two organizations representing these plans.
The Medicaid managed care plans said they want more clarity as it pertains to the One Big Beautiful Bill Act's exceptions for people who are medically frail or who otherwise have special needs.
The groups are also seeking guidance from CMS on best practices for states, health plans and providers regarding the sharing of substance use disorder (SUD) patient data, while remaining compliant with patient privacy protections.
Lag time when data sharing between the Social Security Administration and states can be an issue, according to the letter, and MCOs have raised concerns about how the delays might negatively impact enrollment and pose barriers to securing exemptions from community engagement requirements.
The letter calls on CMS to work with the SSA to support timely data sharing with states.