A little over a week after CMS announced significant changes to Medicaid work requirements set to take effect in January 2027, healthcare leaders speaking at AHIP 2026 raised concerns about implementation, with one calling on CMS to grant states an extension.
Last week, CMS issued an interim final rule that adds conditions to the medical frailty exemption of Medicaid work requirements, which allows people with certain health conditions to not have to fulfill the requirements. These include disability, substance use disorder or complex medical conditions.
The new rule requires that medical frailty be limited to situations in which a person’s condition impairs their ability to meet the work requirement. This means it’s no longer sufficient to merely have one of these conditions to qualify for an exemption. They now have to prove to state authorities that their condition is serious enough that they can’t fulfill the requirements.
During a panel discussion at AHIP 2026 in Las Vegas, healthcare insurance leaders were asked what advice they’d give CMS Administrator Dr. Mehmet Oz over these eligibility changes. One leader noted that while everyone wants healthcare dollars to be spent on people who genuinely need it, it’s important to remember that “people don’t choose to live in poverty.”
“People want to thrive, they want to have economic mobility, they want to have pathways, and it is important to recognize that it takes time to build those pathways. It takes time to create those systems,” said Martha Santana-Chin, CEO of L.A. Care Health Plan. “So the first thing I’d say is, as we’re implementing these, if states are in earnest, demonstrating good faith to implement the requirements, and they need an extension, give them an extension. You can’t create systems in six months, in 12 months, I would argue sometimes in even 18 months. Especially not systems where you’re thinking about leveraging a safety net benefit to connect people to opportunity.”
She added that if CMS rushes to implement these requirements, there will be downstream consequences that will further destabilize communities that are already struggling.
The president of Pennsylvania-based insurer Highmark Health, Karen Hanlon, agreed with Santana-Chin’s comments and urged CMS to be in communication with the states and support them.
“We were recently meeting with the administration in Pennsylvania, and there’s a lot being expected of them, and there’s no additional money that came to do all the things that we just talked about, even on their part,” Hanlon said. “So be in communication with the states, figure out what ways the federal government can support them.”
Another leader on the panel — Dawn Maroney, president of Alignment Health — called for better notices to beneficiaries about eligibility requirements. For example, when someone picks up their check, they should receive a notice that they could be disenrolled from coverage if they don’t meet the requirements.
“It needs to be constant, probably 12 months in advance,” she said.
Photo: designer491, Getty Images
