CMS Publishes Preliminary Guidance for Medicaid Work Requirements, No Answers For Existing Work Requirement Waivers

On December 8, the Centers for Medicare and Medicaid Services (CMS) posted preliminary guidance for the Medicaid work requirements mandated by the One Big Beautiful Bill Act (OBBBA), which passed into law on July 4 this year.

The law requires the creation of new rules by June 2026 and CMS notes in the guidance overview that further planning is only beginning through this initial publication. The agency hopes that the timing of the guidance, prior to most states’ legislative sessions, will help those states “begin procurement of new systems and services to support implementation of the [new requirements].”

The short-term planning window places a heavy burden on both states and CMS, especially as the loss of federal Medicaid funding due to other aspects of the OBBBA will leave state programs shorthanded. As the Georgetown Center for Children and Families blog explains, a careful hand with implementation will be necessary to avoid even larger coverage losses than are anticipated by the Congressional Budget Office (CBO). Notably, the guidance does not explain which states the requirements apply to, though it does mention that some states have Section 1115 demonstration waivers for adult expansions that may apply.

Arizona’s Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS), is one of these states, but the recently-approved waiver includes a potentially broader list of exemptions, one example being “parents, caretaker relatives, foster parents and legal guardians.” The federal legislation only includes exemptions for parents of young children under the age of 13.

In the new guidance, CMS said that it would develop an interim final rule focusing on topics like the role of managed care organizations (MCOs). Two representative organizations of such plans — Medicaid Health Plans of American (MHPA) and the Association for Community-Affiliated Plans (ACAP) sent a letter to the Trump administration early last month requesting flexibilities for the use of data sharing in order to support the launch of the new requirements. According to Fierce Healthcare, MCOs will not be able to stand in as the compliance entity for work requirements, but the organizations hope that insurers will participate in referring members to resources.

We request that CMS clarify that MCOs can serve this function. Medicaid MCOs can serve as an important resource for enrollees to ensure that eligible individuals who are compliant with community engagement requirements continue receiving Medicaid benefits.