Work Requirements Put New Pressure On Medicaid Member Retention

According to a recent report by the JAMA Network, one in five adults covered under Medicaid could lose their benefits due to new work requirements taking effect in January 2027. 

The community engagement (work) requirements apply to the able-bodied, non-pregnant Medicaid expansion population and affect 41 states plus Washington, D.C. These members will be required to participate in at least 80 hours per month of qualifying activities, which can include work programs, community service or at least half-time enrollment in an educational program. 

Although 64% of Medicaid members are currently working either part time or full time, inconsistent work hours could prevent many members from completing the 80 hours a month required to remain eligible. Even those who meet the requirements could lose coverage due to lack of understanding or knowledge of the new process. The Health Management Academy found that 55% of Medicaid enrollees are unaware that work requirements will become a condition of eligibility starting in January. 

While states will be responsible for determining compliance, plans need to be prepared for the effect of member churn on the risk pool. Work requirements tend to disenroll healthier members, many of whom have part-time roles or freelance jobs that make documentation difficult, leaving a sicker, higher acuity whose per member per month (PMPM) cost is higher than the rate set before attrition began. A risk pool skewed toward higher-acuity, higher-cost members without a corresponding adjustment in capitated payment can negatively impact a plan’s sustainability.

Retaining healthier members whose care is well managed balances the risk pool and allows plans to continue coverage to the members who need it the most.  By using existing data to better understand members and implementing retention strategies, plans can remain sustainable and members can get the care they need.

Cost curve of a Medicaid member

When Medicaid members first enroll, health plans often have to invest money to manage their unmet health needs. Once a plan has helped a member improve their overall health and wellbeing, the cost of care begins to decline and reflects that investment. 

Although members who lose coverage for administrative reasons rather than eligibility often do re-enroll into Medicaid coverage, the gap in coverage can unwind the progress made with a member. For example, someone with diabetes who goes without coverage for months can become a higher utilizer, seeking care in the emergency room rather than a primary care setting. If that member comes back to the same plan, the plan absorbs the cost of a member who is now sicker than when they left, losing the value of its earlier care management investment. If that member enrolls elsewhere, the plan loses the member and the investment entirely and the member is put back into a cycle of unmet medical needs. 

Turning outreach into retention

Medicaid continuous enrollment was set into motion during the Covid-19 public health emergency. When the PHE ended, many Medicaid members lost coverage as redeterminations were reinstated. KFF reported 73% of this coverage loss was due to procedural disenrollment and paperwork reasons, rather than members being determined ineligible. 

Although health plans cannot determine compliance, they can support members who are at risk of losing coverage. Every outreach touchpoint, whether it is helping a member understand documentation requirements, reminding them of deadlines or connecting them to community engagement supports, is also a retention opportunity. 

Support throughout the redetermination process can increase retention by simply helping members avoid procedural disenrollment. Providing this positive member experience during a stressful time can also lead to loyalty. When given the opportunity to change plans, a member may choose to stay because of the connection built during the process.

This member communication and support should be technology-forward while remaining personal. Most Medicaid members are smartphone users. Meeting members where they are and making accessibility a priority can increase the likelihood of connecting with members. Communication that’s personalized, written at the appropriate reading level and available in multiple languages will better resonate with members. 

Data plans already have

To understand where to focus retention efforts, plans must first understand their members. The good news is that most already have the data they need to see which members are at risk. Claims history, utilization trends and medical loss ratio (MLR) data by member tenure can show which members are trending toward higher cost. That data can identify the members whose care is well-managed and who represents the strongest case for retention investment, as well as the members most likely to need extra support to avoid a costly gap in care.

Plans should be looking at data now and determining the appropriate retention strategy to prepare for churn that will likely result from the work requirements. A proactive approach can help mitigate member churn and stabilize the risk pool that is essential for the long-term health of plans and members.

Photo: designer491, Getty Images

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