States to Spend Millions Preparing for Medicaid Changes

New work requirements may prevent eligible people from accessing healthcare coverage

Published on Mar. 2, 2026

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Across the nation, states face high costs to prepare for the Jan. 1 kickoff of new Medicaid eligibility mandates affecting millions of lower-income adults. The task of updating computer systems and adding staff is likely to exceed $1 billion, which will be borne by a mixture of federal and state tax dollars. As a consequence, some eligible people may lose their healthcare coverage.

Why it matters

The Republican tax and spending law signed by President Trump is financed, in part, by sweeping Medicaid changes intended to cut government spending. Two of the most prominent will apply in four-fifths of the states, affecting Medicaid enrollees ages 19 through 64, without young children, whose incomes are above the typical eligibility cutoff. These new requirements could lead to 6 million fewer people with health insurance, according to the Congressional Budget Office.

The details

The new Medicaid eligibility mandates will require participants to work, volunteer, or enroll in school for at least 80 hours per month. They will also face eligibility reviews every six months instead of annually, meaning they could lose coverage more quickly when their circumstances change. States must update their online portals, aging computer systems, and methods of verifying information through various databases to comply with the new requirements. Most will have to turn to private contractors to meet the time crunch, and at least 10 companies have agreed to offer discounted services.

  • The new Medicaid eligibility mandates will take effect on January 1, 2027.
  • The federal government will start penalizing states with too many Medicaid payment errors in October 2029.

The players

Toi Wilde

Chief Information Officer for the Missouri Department of Social Services.

Jason Reilly

A partner at Guidehouse, a firm that is advising several states on the Medicaid requirements.

Joan Alker

Executive Director of the Center for Children and Families at Georgetown University, who warns that the new requirements could prevent people who need healthcare from getting it.

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What they’re saying

“Our current eligibility systems are pretty old, and the ability to change them is very, very difficult.”

— Toi Wilde, Chief Information Officer, Missouri Department of Social Services (latimes.com)

“Making those technology upgrades 'is going to be a lift. It's not something straightforward. It's not easy.'”

— Jason Reilly, Partner, Guidehouse (latimes.com)

“A huge amount of funding is going to go to vendors to construct these complicated red-tape systems that prevent people who need it from getting healthcare. In my view, that is a big, big risk.”

— Joan Alker, Executive Director, Center for Children and Families at Georgetown University (latimes.com)

What’s next

The federal government is expected to release the final rules defining some of the exceptions to the work requirements, such as how to determine who qualifies as 'medically frail', in June 2026.

The takeaway

The new Medicaid eligibility mandates, while intended to cut federal spending, come with a high price tag for states that must update their technology and administrative systems. This raises concerns that the changes could ultimately prevent some eligible people from accessing the healthcare coverage they need.