Modified · Regulatory: Medicaid

The OBBBA, passed in July 2025, includes requirements that may reduce the number of members eligible for state Medicaid Expansion programs by requiring work or community engagement by members and for state Medicaid agencies to redetermine member eligibility at more frequent intervals, along with adding a "Cost Sharing" or "Co-Pay" for certain medical services. These changes could have the effect of increasing the overall morbidity of the Medicaid Expansion population largely beginning in 2027, subject to state implementation plans. Several other provisions of the OBBBA, such as adjustments to provider taxes and state directed payments beginning in 2028, may have the effect of reducing the amount of federal funding for Medicaid, which could result in changes in the design of Medicaid programs, including coverage of benefits, eligibility, and/or provider payment rates. For example, in July 2026, New York will terminate terminated its Essential Plan-5, which provided state-subsidized healthcare for individuals from 200% to 250% of the Federal Poverty Level (FPL). The OBBBA also includes a restriction against paying certain providers designated as "prohibited entities" as of October 1timing of regulatory guidance and other rulemaking changes will be critical to ensuring state and MCO implementation readiness. On June 29, 20252026, which has the potential to create access to care issuesa coalition of 26 states, including 24 Democratic attorney generals and network gapstwo governors, challenged CMS' interim rule issued on June 3, 2026 implementing the work requirements. The timing lawsuit is asking the court to block certain provisions of regulatory guidance and other rulemaking changes will be critical to ensuring state the interim final rule that it alleges are unlawful. The lawsuit may create additional delays and MCO uncertainty regarding the implementation readinessand effect of work requirements on Medicaid beneficiary eligibility.