JEFFERSON CITY, Mo. (AP) — Starting January 1, 2024, new Medicaid eligibility mandates will require some adults to demonstrate that they are working, volunteering, or taking classes. To implement these changes, many states must invest millions in upgrading their computer systems and technology infrastructure, as they prepare for the increased administrative burdens these requirements will entail.
The federal government has allocated $200 million to assist states in meeting these new mandates, but an Associated Press analysis suggests that costs could exceed $1 billion across more than 25 states when accounting for necessary technology upgrades and additional staffing. This financial burden will be shared between state and federal tax dollars.
Updating state Medicaid systems is a complex task, as each state manages its own programs, requiring tailored solutions rather than simple software updates. Toi Wilde, the chief information officer for the Missouri Department of Social Services, noted that their existing systems are outdated and challenging to modify.
The new requirements are part of a broader move to streamline Medicaid and are expected to affect up to 6 million lower-income adults between the ages of 19 and 64 who do not have young children. These individuals must work or perform community service for a minimum of 80 hours per month or enroll at least half-time in educational programs. Additionally, they will undergo eligibility reviews every six months, rather than annually, raising the risk of losing coverage when circumstances change.
The proposed changes are designed to save the federal government approximately $388 billion over the next decade, according to the Congressional Budget Office. However, successful implementation hinges on states being able to update their online portals, improve their eligibility systems, and refine processes for verifying information through various databases.
States are under pressure to act swiftly as the federal government will begin imposing penalties starting in October 2029 for Medicaid payment errors. States are also aiming to secure extra federal funding to support these developments. Currently, the federal government will cover up to 90% of expenses related to the development of systems for determining Medicaid eligibility, while offering 75% for maintenance costs.
Missouri is among the states that have received early approval for the 90% funding rate and is thus hastening a $32 million appropriation to attract vendors for technology upgrades and enhanced user-support systems. Missouri's social services agency anticipates hiring about 120 additional staff at a cost of $12.5 million to manage the expected increase in administrative workload over the coming year.
Multiple other states are also forecasting significant costs. Maryland is set to spend over $32 million, while Kentucky anticipates more than $46 million in expenses. Colorado has projected costs exceeding $51 million, and Arizona estimates around $65 million, including the hiring of 150 additional employees.
Some states, like Arkansas, are still assessing the financial implications of the Medicaid changes, while Nebraska aims to implement work requirements in May 2024, several months before the federal deadline. However, Nebraska has not disclosed associated costs or details regarding its planning. In contrast, Georgia is currently the only state with existing work requirements for some Medicaid recipients, having previously received special federal approval to expand coverage to certain adults.
Georgia's Pathways to Coverage program incurred administrative costs amounting to more than $54 million from 2021 to early 2025, largely due to technology upgrades, which exceeded the medical assistance paid out during that same timeframe. This has prompted some analysts to voice concerns regarding the viability of the work requirements as they roll out in other states, especially given the complications and potential obstacles they present.
Joan Alker, executive director of the Center for Children and Families at Georgetown University, warned that excessive funding will be directed toward managing complex bureaucratic systems that might ultimately hinder access to healthcare for those who need it the most.
