This month, Nebraska became the first state in the nation to begin rolling back Medicaid coverage by way of the federal work requirements enacted under HR 1. Dozens of other states will follow next year.
But the nation’s largest health insurers and hospital operators say they’re prepared for what comes next, describing the new rules as a manageable enrollment issue and not a repeat of the disruption to the program that followed the end of the pandemic.
During that redetermination period, states had to resume eligibility reviews for a Medicaid and CHIP population that had grown to roughly 94 million during the pandemic. By the end of the main unwinding period in 2024, more than 56 million people had renewed coverage and more than 25 million had been disenrolled.
This time around though, executives expect the effects of work rules to be smaller and spread over several years. Under HR 1, adults ages 19 to 64 who receive Medicaid benefits in expansion states must work, attend school or perform community service for at least 80 hours per month to maintain their coverage, with exemptions made for groups including pregnant women, some parents and caregivers, and people considered medically frail. States are required to have the rules in effect by Jan. 1.
“As we think about this process compared to the broader redeterminations process, it’s obviously very different in terms of scope and scale. It’s a much more targeted population,” Centene CEO Sarah London said on the company’s most recent earnings call July 28.
Expansion members made up about 20% of Centene’s overall Medicaid enrollment at the start of 2026, a share the company expects to fall to about 18% by year-end. For the company overall, which is the country’s largest managed Medicaid insurer, Ms. London said that would amount to “mid-single digit attrition” spread across 2027, 2028 and possibly 2029, depending on when states begin enforcement of the new rules.
“We also didn’t have the explicit guidance that CMS has given in terms of mid-cycle and retro rate adjustments,” she said. “We just have a different set of tools at our disposal as we think about managing this over the next couple of years.”
Executives at Elevance Health, which operates Medicaid plans in more than a dozen states, said similarly last month that expansion members only represent about 20% of the company’s overall Medicaid business.
“We don’t view [it] as a broad-based reset or anything comparable to the post-PHE unwind,” CFO Mark Kaye told analysts July 15. “That’s really significant because I would say that means the acuity shift to a large degree is behind us.”
The Congressional Budget Office has estimated work requirements will reduce federal Medicaid spending by more than $326 billion over 10 years while leaving 5.3 million fewer people insured.
On the ground in Nebraska, an estimated 200 people have lost coverage since Aug. 1 amid the state’s first work requirements check. Leadership at Molina Healthcare, one of three insurers that administers the state’s Medicaid program, said the early rollout helps provide insight into two major implementation questions: what documents states will accept to prove eligibility and how they will define medical frailty for exemptions.
“Nothing we learned in Nebraska, nor in any of our other states, causes us to change from our long-term assumption that Medicaid membership will decline by 2% to 3% each year for a three-year period, which is fully baked into our $64 billion premium projection, and our assertion that the acuity shift will be minor and protracted, so it’ll be picked up in rates,” President and CEO Joseph Zubretsky said July 23.
At Nashville, Tenn.-based HCA Healthcare, CFO Mike Marks said July 24 the organization is approaching work requirements as a more concentrated risk, with expansion states accounting for about 40% of its Medicaid revenue. HCA is also adding coverage-support staff in its hospitals to help patients document eligibility and keep coverage when they qualify.
But multiple hospital operators are still absorbing the effects of other coverage disruptions that began earlier this year with the expiration of enhanced ACA subsidies, which has led to higher premiums and falling exchange enrollment across the country. Several large health systems disclosed during second quarter calls that they significantly underestimated the effects of the expiration as patients who dropped coverage kept showing up – nearly all of them uninsured.
“We underestimated how much of an impact that would have, how many people would continue to come to our health system,” Community Health Systems CFO Jason Johnson said.
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