CMS details implementation of Medicaid 6-month eligibility checks under the OBBBA

CMS has issued guidance on how Medicaid expansion states should implement the higher-frequency eligibility redeterminations as required under the One Big Beautiful Bill Act (OBBBA).

Starting in 2027, states must conduct eligibility checks of most adults in the expansion population every six months, up from annually (the guidance refers to the 2025 law as the Working Families Tax Cut legislation, which is the Trump administration’s preferred name). The increased checks similarly apply to people covered under Section 1115 demonstrations that provide minimum essential coverage to all expansion adults in the state.

Exemptions to the new requirement pertain to certain American Indian and Alaska Native individuals and to people whose Medicaid eligibility is not based on income, along with beneficiaries in any states where expansion-type coverage has been available only through narrower Section 1115 waivers (e.g., Wisconsin).

The six-month requirement has raised concerns among providers about an increase in coverage lapses among individuals who miss paperwork or do not respond on time. A recent RAND analysis projected that the six-month check will lead to a Medicaid enrollment reduction of 923,000 as of 2034, while the work requirement will cause a net disenrollment of 5.3 million and new curbs on funding through provider taxes will trigger a decrease of 1.5 million.

Renewal procedures remain unchanged under CMS regulations

States will have to follow the same eligibility procedures when conducting checks every six months as they do under current policy, the guidance states.

Requirements include attempting to conduct an ex parte renewal using available data, allowing states to approve a renewal without contacting the beneficiary. If ex parte is not available, the state should send a prepopulated renewal form. States must give beneficiaries at least 30 days to respond and provide a 10-day notice and fair-hearing rights before taking adverse action.

CMS advises states to prepare for increases in administrative workload and fair-hearing requests.

“CMS recognizes the program changes will require IT system work to fulfill policy implementation,” the guidance states. “State Medicaid agency IT system costs necessary to support requirements could be eligible for enhanced [federal funding].”

The agency says it will provide technical support and further guidance as needed.

State options for implementing the six-month renewal cycle

States can choose to shift to a six-month renewal window that begins as early as Jan. 1, 2027, for all enrollees who are enrolled in Medicaid on that date.

“States implementing this option would need to identify individuals whose renewal initiation dates would need to be rescheduled (and when), initiate a large volume of renewals as early as Jan. 1, 2027, and maintain that renewal schedule into the future,” the guidance states.

As an alternative that would allow eligibility checks to be more spread out among the affected beneficiary pool at the outset of the new requirements, CMS is presenting the option to keep previously scheduled renewal dates and implement the six-month period after each beneficiary’s first 2027 renewal.

Providers should take note of which option their state chooses. CMS indicates the second option is logistically preferable.

“Because this option allows states to continue processing renewals in 2027 based on (and without moving) already-scheduled renewal initiation dates, it enables states to avoid a large cluster of renewals in January 2027 due to having to redetermine eligibility for many beneficiaries enrolled in the ‘adult expansion group’ at once, and thus would also enable states to retain a more even renewal distribution into the future,” according to the guidance.

CMS acknowledges a potential increase in challenging scenarios where households have members with different renewal schedules, and where someone shifts between eligibility groups and therefore moves from a 12-month to a six-month redetermination window, or vice-versa.

Interaction with the looming Medicaid work requirement

CMS notes that many of the individuals affected by the increased eligibility checks also will be subject to work requirements starting in 2027. That means adherence to those requirements (referred to as community engagement requirements in agency guidance) will have to be assessed every six months for most adults in the expansion population. In cases when an enrollee is ruled ineligible due to noncompliance with work requirements, states must provide specific notice and give the individual a chance to demonstrate compliance.

Some people will be subject to the six-month eligibility check but exempt from the work requirement, CMS notes. These categories include parents of children younger than 14, as well as pregnant women and people with disabilities, although many such individuals in the last two categories qualify for Medicaid through traditional criteria and thus are not subject to either the work requirement or the six-month renewal.

“CMS plans to release future guidance to states on how to implement the community engagement requirements and implications of these requirements for renewals of eligibility,” the agency states.