It is more than halfway through 2026 and more than one year since the passage of HR 1. From policy shifts to fraud concerns to insurer strategies, Medicaid has been in an unceasing state of uncertainty.
Leading up to 2027, the reality of more frequent eligibility checks and work requirements is beginning to set in. CMS’ interim final rule governing the work requirements has been met with backlash, including an Aug. 4 letter from the entire Senate Democratic caucus. The letter followed a failed attempt by half of the states to temporarily block parts of the rule.
Meanwhile, speculation around fraud, waste and abuse in Medicaid and other government programs has continued to pick up steam this summer. In a July 28 news release, CMS said its “Medicaid Fraud War Room” found 50 high-risk providers linked to more than $203 million in Medicaid payments in its first 88 days. Medicaid provider freezes have been taking place throughout the country.
CMS also proposed sweeping changes to Medicaid provider tax policy July 21, including a new tax class for payers. The agency estimates the updates would cut federal spending by $246 billion through 2035.
Amid these national moves, particular states have been facing scrutiny from the federal government, witnessing market exits or taking liberties with their Medicaid programs. Here are a few to keep an eye on.
Nebraska
While some states had explored work requirements prior to HR 1, Nebraska was an early adopter in this latest iteration.
Days before the state’s first work requirements check, Nebraska’s Medicaid director, Drew Gonshorowski, said in a Tradeoffs interview that he estimated roughly 200 people from the expansion population could have been denied Medicaid renewals Aug. 1.
Shortly after Aug. 1, a spokesperson for the Nebraska Department of Health and Human Services told Becker’s that it did not have exact renewal figures for July yet.
Arkansas
Rather than using a State Plan Amendment, Arkansas expanded Medicaid through a Section 1115 waiver, subjecting the state to federal review. Recently, CMS verbally denied the waiver’s renewal, which could affect coverage for more than 200,000 residents. The current waiver expires at the end of 2026.
A spokesperson for the Arkansas Department of Human Services told Becker’s the denial was a result of the waiver not complying with HR 1’s budget neutrality rules that go into effect in 2027.
One of the program’s two participating Medicaid organizations, Centene’s Ambetter, had already shared its intention to exit in 2027, affecting 70,000 people.
California
California’s Medicaid program, Medi-Cal, brought back asset limits for some of its members, including those who are at least 65 years old, have a disability, reside in a nursing home or are in a family that makes too much to qualify for the program under federal tax rules.
Before July 2027, those qualifying for Medi-Cal can own up to $130,000 in assets for a single person, along with $65,000 for each additional person in the household. However, next year, that limit will become just $21,000 for a single person, $31,000 for two people and $1,550 for each other person.
The state is also facing federal pressures with its Medicaid program. HHS deferred roughly $867.5 million in payments to California, the department said July 21. California would have to supply further documentation to back high-risk Medicaid claims.
Minnesota
At the same time HHS announced California’s deferral, the department also confirmed a $199 million deferral for Minnesota. The total deferral amount for the two states surpassed $1 billion. The latest deferral builds upon earlier funding threats.
Indiana
Indiana Gov. Mike Braun directed the state to engage in CMS’ “Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth” model for GLP-1 access in Medicaid. While BALANCE is on hold for Medicare Part D, states in the Medicaid drug rebate program had until July 31 to signal interest. BALANCE will offer more affordable GLP-1s for eligible residents.
District of Columbia
Elevance Health’s Medicaid subsidiary in the district, Wellpoint D.C., left the area’s Medicaid managed care program Aug. 1. Enrollees with Wellpoint, previously known as Amerigroup D.C., automatically moved to AmeriHealth Caritas, a July 2 notice outlined.
Elevance is laying off 85 employees in Washington, D.C., amid the departure. As Elevance’s Medicaid business struggles, the company is anticipating more exits in the next 12 to 18 months. As of June 30, the company had about 8.4 million Medicaid members across the U.S.
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