States Face Another Challenge With Medicaid Work Rules: Staffing Shortages

Why It Matters

The staffing gap threatens timely benefit delivery and could trigger the loss of Medicaid coverage for up to 5 million people, raising costs for states, contractors and the broader health system. It also creates a fiscal paradox: a law aimed at cutting $1 trillion in spending may generate new expenses for hiring and contracting.

Key Takeaways

• New work rules require eligibility checks every six months
• States report hundreds of vacant eligibility positions
• Maximus expects revenue growth despite Medicaid enrollment declines
• CBO projects up to 5 million people could lose coverage
• Call center wait times exceed three hours in some states

Pulse Analysis

The One Big Beautiful Bill Act represents the latest federal push to tighten Medicaid eligibility, mandating semi‑annual redeterminations for millions of enrollees. While proponents tout nearly $1 trillion in projected savings over eight years, the policy’s success hinges on state agencies’ capacity to process a surge of paperwork. The law’s rollout coincides with a broader post‑pandemic “unwinding” effort that already left more than 25 million people temporarily without coverage, highlighting the delicate balance between cost containment and access.

State Medicaid offices are confronting a chronic staffing crisis that predates the new work rules. Reports from Idaho, New York, Pennsylvania and other states reveal open vacancies ranging from 40 to 400 eligibility positions, translating into millions of dollars in recruitment and training costs. These shortages have already stretched processing times; in December, roughly 30% of Medicaid and CHIP applications in Washington, D.C., Georgia and other jurisdictions exceeded the 45‑day benchmark. Long call‑center queues—three‑hour waits in Hawaii, hour‑plus delays in Nevada—underscore how understaffed contact centers impede beneficiaries from resolving coverage questions, a problem that will intensify under the upcoming requirements.

For beneficiaries, the stakes are stark. Losing Medicaid can mean forfeiting essential medical care and facing out‑of‑pocket costs for medications and doctor visits, a burden many low‑income families cannot absorb. Contractors like Maximus, which supports eligibility functions in 17 states, anticipate revenue growth as transaction volumes rise, but reliance on private firms does not solve the underlying workforce shortage. Policymakers must weigh the projected fiscal gains against the human cost of delayed or denied services, and consider targeted investments in hiring, training and technology to ensure the system can meet its expanded obligations.