CMS recently released a letter to State Medicaid Directors that provides implementation guidance for the requirement that states redetermine eligibility for Medicaid expansion adults every six months instead of annually, beginning in 2027.

At first glance, this sounds like a technical eligibility change. But it will have major implications for coverage stability, state operations, and managed care plans.

A few things we are watching closely:

• Coverage “churn” will likely increase. More frequent renewals inevitably lead to higher rates of disenrollment for procedural reasons – even among people who remain eligible. Enrollees can be disenrolled for not returning paperwork on time or not being able to navigate the enrollment system – especially if they are used to going through the coverage process once a year. A recent analysis by RAND found that hundreds of thousands of people could lose coverage because of this policy. 

• Administrative capacity will be stretched. Going from annual reviews of Medicaid eligibility to semiannual reviews doubles the number of eligibility checks states must conduct for their expansion population. System automation, ex parte renewal processes, and eligibility staffing will become more important than ever especially with new work requirements going into effect for the same population in 2027. 

• Managed care plans will play a crucial role in supporting the implementation of this process. Just like during the “unwinding” process, states will likely look to MCOs to support member outreach, data verification, and renewal assistance. For plans, this will inevitably raise important questions about incentives, accountability, and how renewal performance is incorporated into state contracts.

Our team is spending a lot of time digging into what this guidance means for states, managed care plans, and other stakeholders. If you’re thinking about how this guidance and other upcoming changes to Medicaid policy might impact your priorities, please reach out!

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