Katie Crouch knows the frustration of navigating a system designed to help but often feels like an insurmountable barrier. For months, she battled to understand her Medicaid benefits, a process she described as a "series of dead ends." Her experience, echoing that of countless others, highlights a growing crisis within state Medicaid agencies, a crisis that is poised to intensify with the implementation of new federal mandates.
"The first time, it’ll ring interminably," Crouch, a 48-year-old Delaware resident, recounted her ordeal. "Next time, it’ll go to a voicemail that just hangs up on you. Sometimes you’ll get a person who says they’re not the right one. They transfer you, and it hangs up. Sometimes, it picks up and there’s just nobody on the line." This arduous journey left her uncertain about her Medicaid coverage for the current year, a critical issue for someone who relies on the program for health insurance due to a debilitating brain aneurysm suffered a decade ago.
Crouch also has Medicare, a program for individuals 65 and older or those with disabilities. Her Medicaid coverage had been instrumental in covering her $200 monthly Medicare deductibles. However, for the past three months, she has been forced to bear this cost herself, placing a significant strain on her family’s fixed income. This financial burden underscores the tangible consequences of bureaucratic inefficiency and system strain on vulnerable populations.
Her struggles are far from isolated. State Medicaid agencies nationwide are grappling with chronic understaffing, a persistent challenge that hinders their ability to process applications, manage renewals, and respond to the myriad inquiries from enrollees. Health policy researchers warn that this workforce shortage is not merely an administrative inconvenience; it directly impedes individuals’ ability to fully access and utilize the benefits they are legally entitled to.
Now, a new federal law, the "One Big Beautiful Bill Act," signed into law by President Donald Trump last summer, is set to exacerbate these existing strains. This legislation, expected to reduce Medicaid spending by nearly $1 trillion over the next eight years, imposes significant new demands on state agency staff. Specifically, in states that expanded Medicaid to cover more low-income adults, agency workers will be tasked with not only determining eligibility for new work requirements but also increasing the frequency of eligibility verification from annually to every six months.
Responses from state agencies contacted by KFF Health News indicate a widespread recognition of the impending challenge. Many anticipate a critical need for additional personnel to manage the increased workload. This influx of mandates will inevitably place further pressure on an already overextended workforce, potentially making it even more difficult for individuals like Katie Crouch to receive basic customer service. Consumer advocates and health policy researchers, many with direct experience in state government, express grave concerns that these changes could lead to a significant number of eligible individuals losing access to essential benefits.
The Mounting Strain on State Medicaid Agencies
Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities and a former associate director of the Illinois Department of Human Services, characterized the current state of affairs as "struggling significantly." She predicts that the upcoming changes will introduce "significant additional challenges."
The core of the Republican argument behind these Medicaid reforms is to incentivize enrollees to seek employment. However, a substantial body of research on existing Medicaid work requirement programs has yielded little to no evidence that they effectively increase employment rates. Instead, the Congressional Budget Office has projected that these new rules will be the most impactful component of the broader GOP budget law in terms of reducing health coverage. In its analysis, the CBO estimated that by 2034, more than 5 million people could lose their health coverage due to these provisions.
The logistical hurdles are immense. Consumer advocates and researchers point to the current inability of many states to process Medicaid applications and renewals in a timely manner. The Centers for Medicare & Medicaid Services (CMS) monitors states’ ability to process the most common type of benefit application within a 45-day window. Data from December reveals a stark reality: approximately 30% of all Medicaid and Children’s Health Insurance Program (CHIP) applications in Washington, D.C., and Georgia exceeded this deadline. Wyoming saw more than a quarter of applications take longer than 45 days, and in Maine, one in five applications missed the target.
The public release of state Medicaid call center data by CMS in 2023 further illuminated the systemic strain. In Hawaii, callers experienced wait times exceeding three hours in December. Oklahoma and Nevada callers, on average, waited for nearly an hour and over an hour, respectively.
The challenges are compounded by the recent "Medicaid unwinding" process, where states began re-verifying eligibility for enrollees who had been protected from disenrollment during the COVID-19 public health emergency. This process, which began in 2023, did not go smoothly in many states, resulting in more than 25 million individuals losing their Medicaid benefits. Health policy researchers and consumer advocates anticipate that implementing the new work rules will present an even greater administrative and logistical challenge. These new mandates necessitate substantial changes to IT systems and extensive training for eligibility verification staff, all to be accomplished within tight timelines.
Sophia Tripoli, senior director of policy at Families USA, a health care consumer advocacy organization, emphasized the scale of the undertaking, describing it as "a much larger scale of administrative complexity."
Katie Crouch’s case illustrates the difficulties individuals face. After months of attempting to contact her state’s Medicaid agency, she eventually received clarity on her benefits only after reaching out to the office of U.S. Representative Sarah McBride (D-Del.). McBride’s office intervened, prompting the state Medicaid agency to contact Crouch with an update. The update revealed that she had, in fact, not qualified for Medicaid, a fact that had apparently eluded state officials during two years of interactions. "It makes absolutely no sense" that the state never identified her ineligibility, Crouch stated, highlighting a fundamental breakdown in the system’s accuracy and responsiveness. Delaware’s Medicaid agency did not respond to requests for comment regarding Crouch’s specific situation.
States Grapple with Staffing Shortages Amidst New Demands
In late March, several states communicated to KFF Health News their urgent need for additional staff to effectively implement the new work requirements. Idaho reported 40 open positions for eligibility workers. New York projected a need for 80 new employees, with an estimated cost of $6.2 million, to handle the increased administrative burden. Pennsylvania faces a significant deficit, with nearly 400 vacant positions in county human services offices. Indiana’s Medicaid agency has 94 open positions, while Maine aims to hire 90 additional staff, and Massachusetts seeks to recruit 70 more.
Montana, as of early March, had filled only 39 of the 59 positions state officials deemed necessary. Despite this shortfall, the state plans to proceed with the rule implementation on July 1, even as it continues to struggle with system backlogs that have already delayed benefits for applicants.
In Missouri, the Department of Social Services has been actively cutting staff, resulting in 1,000 fewer front-line workers compared to a decade ago. This reduction comes as the number of enrollees in both Medicaid and the Supplemental Nutrition Assistance Program (SNAP) has more than doubled, according to remarks made by agency director Jessica Bax during a public meeting in November. Bax noted that initial expectations of increased efficiency through eligibility system upgrades "did not come to fruition."
Recruiting and retaining qualified personnel for these roles presents another significant obstacle. Tricia Brooks, a researcher at the Georgetown University Center for Children and Families, explained that the jobs, which require months of training, are often emotionally taxing and offer relatively low pay. "They get yelled at a lot," Brooks, who previously managed New Hampshire’s Medicaid and CHIP customer service program, observed. "People are frustrated. They’re crying. They’re concerned. They’re losing access to health care, and so sometimes it’s not an easy job to take if it’s hard to help someone."
To navigate these complexities and comply with the new federal law, states are increasingly turning to government contractors, allocating millions of dollars for their services. Maximus, a prominent government services contractor, provides eligibility support, including operating call centers, in 17 states that have expanded Medicaid. The company reports interacting with nearly three in five individuals enrolled in Medicaid nationally. During a February earnings call, Maximus leadership indicated that their billing model allows for charging based on the number of transactions completed for enrollees, irrespective of the total number of individuals enrolled in a state’s program.
Marci Goldstein, a spokesperson for Maximus, stated that the company employs "no one-size-fits-all approach" to its services or pricing. David Mutryn, Maximus’s chief financial officer and treasurer, projected continued revenue growth from their Medicaid-related business, even as enrollment fluctuates, attributing this expectation to the "additional transactions that will need to take place." In 2025, this segment of Maximus’s business generated $1.76 billion.
Broader Implications and Human Stakes
The consequences of losing Medicaid coverage extend far beyond mere inconvenience. Elizabeth Edwards, a senior attorney with the National Health Law Program, emphasized that many individuals enrolled in Medicaid lack the financial resources to afford healthcare independently and may not qualify for subsidies under the Affordable Care Act. This precarious situation can lead to an inability to obtain essential medications or necessary medical care, resulting in potentially "devastating" health impacts.
"The human stakes of this are people’s lives," Edwards stated, underscoring the profound human toll of policy changes that restrict access to essential healthcare. The confluence of understaffed state agencies, the introduction of stringent new federal mandates, and the limited effectiveness of work requirements raises serious concerns about the future accessibility of healthcare for millions of low-income Americans. The anticipated $1 trillion in Medicaid spending reductions, coupled with the administrative complexities and potential for increased disenrollment, paints a stark picture of the challenges ahead for both enrollees and the systems designed to serve them.
