IMPLEMENTING MEDICAID WORK REQUIREMENTS: LESSONS FROM UNWINDING

The following information was released by the Henry J. Kaiser Family Foundation:

Authors: Amaya Diana and Robin Rudowitz

The 2025 reconciliation law requires states to condition Medicaid eligibility for adults in the Affordable Care Act (ACA) Medicaid expansion group and enrollees in partial expansion waiver programs (Georgia and Wisconsin) on meeting work requirements starting January 1, 2027, with the option for states to implement requirements earlier. To implement Medicaid work requirements, states will need to make policy and operational decisions, develop new outreach and education strategies, implement system upgrades or changes, and hire and train staff, all within a relatively short timeframe.

As states begin the process of implementing new Medicaid work requirements, they may draw on lessons from their recent experience with "Medicaid unwinding." In April 2023, states began the process of unwinding the Medicaid continuous enrollment provision, a pandemic-era policy that generally stopped disenrollment in return for extra federal funds provided to states. During the unwinding, states conducted eligibility redeterminations for everyone on the program and disenrolled those who were no longer eligible or who did not complete the renewal process.

State experience with Medicaid unwinding illustrated the complexity of Medicaid eligibility processes and that outcomes reflect federal and state policy decisions, implementation and systems. KFF interviews with state officials, managed care plans, primary care associations, and advocacy organizations involved with the Medicaid unwinding in 2023, as well as interviews from the 23rd annual budget survey of Medicaid officials, provided lessons about outreach and engagement and renewal processes. This brief highlights lessons from unwinding that could help inform work requirement implementation. Key takeaways include:

Successful outreach and communication generally utilize an array of strategies and partnerships to reach and educate enrollees about changes to the program. Managed care organizations (MCOs) can help identify enrollees and provide outreach.

Streamlined renewal processes and increases to ex parte, or automated, renewals help to maintain enrollment for those eligible and reduce state burdens; however, implementing multiple policy changes in tight timeframes can result in significant challenges for systems and staff.

While states can draw on their experiences from the Medicaid unwinding, they will face new challenges unique to implementing work requirements. These include the need to collect and incorporate new information when making eligibility determinations, conduct targeted rather than broad outreach, and implement complicated system changes and integrate new data, as well as the inability to replicate certain flexibilities that were available during unwinding.

What lessons from unwinding could inform implementation of work requirements?

Successful outreach and communication generally utilize an array of strategies to reach and educate enrollees about changes to the program.During unwinding, many states expanded the number of touchpoints before renewal and engaged in multi-modal communication strategies. These included broad efforts (e.g., traditional communication campaigns, paid advertising, press conferences, and toolkits for partner organizations), direct outreach to enrollees (e.g., mailers and text messaging), and targeted outreach to certain populations such as people with limited English proficiency. States also used new strategies to update contact information, such as using the National Change of Address database and accepting updated contact information from managed care organizations (MCOs), with reductions in returned mail. Groups reported that finding the correct balance of frequency of outreach and ensuring clear messaging is key to not overwhelm or confuse enrollees.

Partnerships can amplify outreach and provide feedback loops. During the Medicaid unwinding, most states worked with a wide range of groups to reach Medicaid enrollees, including managed care organizations (MCOs), providers (such as community health centers, other primary care providers, and pharmacies), community-based organizations, navigator/assister organizations, and faith-based groups to amplify state outreach efforts. State officials and groups working directly with affected enrollees found local marketing and word of mouth to be effective methods for reaching enrollees. Many states also held regular meetings to provide updates and review data with others involved in unwinding. Feedback loops with community partners helped identify early problems; conversely, limited state engagement and communication contributed to frustration and more reports of problems.

Managed care organizations (MCOs) can help identify enrollees and provide outreach. During unwinding, some MCOs were able to take on new roles with enrollees as a result of certain waivers and flexibilities (post-unwinding, states have the option to permanently adopt many renewal strategies). State officials and managed care representatives reported that MCOs providing direct outreach to enrollees and sharing updated contact information for enrollees with the state were both helpful. Other innovative approaches MCOs took included virtual renewal training events and coordination between MCOs and primary care providers so providers could work with individuals due for renewal.

Implementing multiple policy changes in tight timeframes can result in significant challenges for systems and staff. A number of states reported that their systems were old or difficult to use and not set up to produce real-time analytics. Respondents also cited staffing shortages as an ongoing challenge contributing to slower processing of renewals and backlogs. Several mentioned that their staff was not experienced enough to handle the large workload, mostly due to high turnover among eligibility workers. States mentioned taking steps to increase ex parte renewal rates to reduce the burden on eligibility staff and enrollees and providing additional staff training. Leading up to the implementation of Medicaid work requirements, states have reported workforce challenges, including the need to hire or reallocate staff in anticipation of increased workloads and the need for additional staff training.

Streamlined renewal processes and increases to ex parte, or automated, renewals help to maintain enrollment for those eligible and reduce state burdens. Heading into unwinding, two-thirds of states reported taking steps to improve the share of renewals processed on an ex parte basis, such as by improving system programming rules or expanding data sources. The ability to perform ex parte renewals varied by state system. Some were able to add data sources and prioritize automating eligibility processes more easily, which in turn reduced the burden on staff.

States reported both benefits and drawbacks to having Medicaid eligibility systems that are integrated with other benefit programs. Integrated eligibility systems allow people to apply for and renew coverage for multiple benefit programs at once. States with Medicaid eligibility systems that were integrated with the Children's Health Insurance Program (CHIP) and social benefit programs like the Supplemental Nutrition Access Program (SNAP) and the Temporary Assistance for Needy Families (TANF) program reported that data sharing across programs helped improve ex parte renewal rates and simplify renewal processes. State officials also reported that it can be more challenging to make changes to integrated systems because of the need to reconcile complex eligibility rules across programs. Waivers allowing use of SNAP data to renew Medicaid were helpful during unwinding and using SNAP data may be helpful in assessing if individuals meet work or exemption criteria for new requirements.

How will implementing work requirements differ from unwinding experiences?

New work requirements represent a major change to Medicaid eligibility policy and will require states to collect and incorporate new information when determining eligibility. While the volume of renewals posed challenging for states during unwinding, there was no change to enrollee eligibility policy. New work requirements will affect both existing enrollees and new applicants, and will require collecting new information to verify compliance or exemption status. For example, states will likely need to add new questions to Medicaid applications and renewal forms, as well as incorporate new data sources (see more below). States will also have to train staff on new eligibility policy and verification requirements. Instead of doing traditional point-in-time determinations, states will have to consider historical information and confirm that an individual was meeting requirements in one or more months prior to application.

While states can draw on their experiences conducting outreach during the Medicaid unwinding, educating enrollees about work requirements may pose unique challenges. While unwinding affected the entire Medicaid population, work requirements affects only a subset of Medicaid adult expansion enrollees. Compared to the broad outreach conducted during unwinding, states will need to provide more targeted outreach to reduce confusion among Medicaid enrollees and applicants who are not affected by the new work requirements. For those who are affected, states will need to educate individuals on the new requirements, the list of exemptions, how to document compliance, and how to know that you need to submit information. States will likely want to work with a narrower subset of community partners than during unwinding that primarily work with or serve Medicaid expansion adults.

Some flexibilities made available during unwinding will not be helpful for verifying compliance with work requirements. CMS encouraged states to adopt a range of waivers and flexibilities to increase ex parte rates and streamline renewals during unwinding. States reported that streamlining renewals for those with zero and low income were among the most helpful waivers. However, these waivers will be less helpful going forward since determining compliance with work requirements may require income documentation and exemptions will not be based on income. Some states also received waivers that allowed MCOs to help their members complete renewals. The new federal reconciliation law prohibits MCOs from being able to determine beneficiary compliance, but states may be able to engage with MCOs to assist with identification and outreach to enrollees and assist members with completing renewals when implementing work requirements.

Implementing work requirements may require more complicated system changes than states experienced during unwinding, due to the need to integrate various data from agencies and external sources. While states will be able to build on system improvements made during unwinding, implementing work requirements will require more varied data to automate verification of exemptions and qualifying activities, such as meeting minimum education hours or participating in substance use disorder treatment. States may need to identify and establish linkages with new sources, such as gig work platforms, student databases, and claims data to increase the share of applicants and enrollees who can be automatically determined to meet the requirements. In addition, when implementing work requirements, states will have to simultaneously implement other forthcoming changes such as changes to eligibility renewal frequency for expansion adults and changes to retroactive eligibility. States also needed to complete work requirement changes for SNAP that went into effect at the end of 2025, which may have delayed the initiation of work on the Medicaid changes for states with integrated Medicaid and SNAP eligibility systems.