On July 4th, President Trump signed H.R. 1, also known as the One Big Beautiful Bill Act, fundamentally altering the landscape for the nation’s social safety net. After months of anticipation, social safety net providers, managed care organizations (MCOs), and state governments are now grappling with how the new law’s changes to Medicaid eligibility and funding will impact their operations and vulnerable individuals.
According to the Congressional Budget Office, some 7.8 million people are projected to lose Medicaid coverage, which will add nearly 11 million more people to the roster of uninsured Americans by 2034. In addition, a reduction in federal Medicaid funding over the next decade will leave states with massive shortfalls in caring for vulnerable populations.
While the law’s implementation will face hurdles, understanding its key provisions is critical for navigating the path forward. In fact, the challenges presented by the bill underscore a crucial point: digitizing eligibility, referral, and care coordination workflows is no longer just an option for efficiency, but a necessary strategy to meet the administration’s goals without overburdening providers and MCOs.
‘Community Engagement Requirements’ Are Now Law
A key provision of the new law establishes “community engagement” requirements that specifically target the Medicaid expansion population—able-bodied adults who gained Medicaid coverage through the Affordable Care Act.
Beginning January 1, 2027, these individuals will be required to document 80 hours per month of work, school, or volunteer activities to maintain their eligibility. This mandate primarily affects adults without young dependent children. (Exemptions are in place for pregnant women, individuals with disabilities, and several other specified populations.)
As a result, states will need to verify completion of these requirements as part of eligibility redetermination twice a year—a process previously completed just once annually. This will create new administrative workflows that many states haven’t previously managed at scale.
Implications for Managed Care Organizations
The verification burden will fall primarily on individual beneficiaries, who would need to demonstrate they’ve met the monthly requirements. However, MCOs are on the front lines of facilitating this process, given their existing relationships with members.
This reality has MCOs concerned about the logistics, time, and expense of this process, especially in light of the new funding reductions. And rightfully so: the increased frequency of eligibility verification alone is expected to drive higher member turnover, making it more difficult for MCOs to conduct the financial projections that inform business planning. While member churn already exists, work requirements will exacerbate the issue, especially since the disparate infrastructures and lack of integration between workforce programs and MCOs will make this a mostly manual process.
Not to mention, if proving compliance becomes too difficult, some eligible individuals may simply bow out, creating hardships for untold numbers of families and communities while also reducing MCO enrollment and revenue.
A Roadmap for the New Reality
Fortunately, MCOs are also well-positioned to help members navigate these requirements through their existing community networks and member engagement systems. To manage these new responsibilities effectively, organizations must take several proactive steps now:
- Map community resources. MCOs can start now to formalize relationships with employment, training, and volunteer programs and opportunities in their service areas. Knowledge of these programs likely already exists with individuals based on their work in the field, but now is the time to document it and leverage resource databases that can be shared across the safety net ecosystem.
- Strengthen existing relationships. Most MCOs and healthcare organizations already have established relationships with community-based organizations, like food banks, clothing resources, transportation support, housing assistance, and other nonprofit services. Strengthen these relationships now to create more seamless pathways between Medicaid eligibility, workforce development, and assistance services.
- Leverage lessons learned. This won’t be the first time states and MCOs have undertaken a massive verification effort. When Medicaid redetermination resumed after COVID-19, states and MCOs managed a complex, large-scale eligibility verification process. Revive those member communication, data management, and care coordination strategies to handle any future verification requirements.
- Focus on member engagement. Launch campaigns early to confirm member contact information and that existing communication channels are effective. The post-COVID redetermination effort demonstrated the importance of maintaining strong member outreach to keep eligible individuals from falling through the cracks.
Digitization: The Key to Cost-Effective Compliance
While previous work requirement pilot programs raised concerns about administrative costs, the only viable pathway to cost-effective implementation lies in leveraging digital infrastructure rather than relying on manual systems.
The urgency for organizations to digitize their care coordination workflows and resource network navigation systems has never been greater. Digital intake, verification, and closed-loop referral systems that integrate with workforce, care management, and electronic health record (EHR) platforms can help individuals more easily navigate job training programs and document work activities for verification. This modern, integrated approach will ensure that administrative costs do not outweigh potential program savings.
Prioritizing Efficiency in the Post-Bill Era
The implementation of community engagement requirements will unfold over the coming years. Federal agencies must issue guidance, states must develop implementation plans, and both will navigate a complex system of compliance and potential extensions.
Regardless of implementation timelines or final federal guidance, organizations should focus now on improvements that make sense—strengthening member engagement, streamlining care coordination, and making safety net services more accessible and easier to navigate.
The ultimate goal shared across the ecosystem remains the same: supporting economic mobility and prosperity and connecting individuals to meaningful opportunities for employment and training. By focusing on this shared objective and building on existing strengths, organizations can prepare for whatever budget and logistics changes may come while continuing to serve their communities effectively.
Digitizing the social safety net does just that by maximizing efficiency in service delivery while dramatically reducing logistical burden and administrative costs for MCOs and providers. As the Medicaid administration landscape evolves, organizations that focus on member-centered service delivery, leverage technology effectively, and maintain strong community partnerships will be well-positioned to adapt to whatever change comes next.
About Carla Nelson
Carla Nelson, MBA has more than 20 years of experience in healthcare operations and policy, where she has focused on improving the care experience and whole-person care. Carla is currently the Senior Director of Healthcare and Public Policy at Findhelp, where she analyzes federal and state policies and translates them into actionable Findhelp strategies that support marketing, product development, and customer and community success.
Prior to Findhelp, Carla was Vice President of Ambulatory Care & Population Health at the Greater New York Hospital Association (GNYHA), a trade organization representing more than 160 member hospitals and health systems. There she worked closely with hospital leaders and government agencies on regulatory matters in a variety of healthcare delivery areas, and led the organization’s social determinants of health portfolio. Before GNYHA, Carla worked in ambulatory care operations at a large academic medical center where she was responsible for project management, patient-centered medical home implementation, and quality and process improvement initiatives across primary care and specialty practices.
