Federal Policy
Budget Reconciliation Act Mandates Medicaid Community Engagement Requirements for States
The 2025 Budget Reconciliation Act (P.L. 119-21) requires states to condition Medicaid eligibility on participation in qualifying community engagement activities for certain applicants and beneficiaries. A new report recommends states develop transparent monitoring and evaluation plans for implementing these requirements. The law creates operational obligations for state Medicaid agencies to establish verification systems, track compliance, and determine eligibility impacts. This represents a significant administrative burden for states and managed care organizations that will need to operationalize work reporting, exemption processes, and disenrollment protocols.
Why it mattersState Medicaid agencies and MCOs must build new infrastructure to verify work activities, process exemptions, and manage eligibility redeterminations tied to community engagement compliance.