States brace for big shifts in Medicaid eligibility rules

The Trump administration’s sweeping new federal funding package (Public Law 119-21) reshapes how states determine and verify Medicaid eligibility. The legislation introduces stricter oversight and more frequent redeterminations — changes that experts say will test the capacity of state IT systems while creating opportunities to modernize.

According to Alex Bejarano, public sector advisor at TransUnion, the law will impact states in three significant ways: fraud prevention, compliance and government efficiency. “Fraud, waste and prevention [will see] stricter identity verification and document requirements to avoid things such as dual or duplicate enrollment and improper payments,” says Bejarano in a new video panel produced by Scoop News Group for TransUnion. “Second, compliance: there’s going to be more frequent redeterminations, going from every 12 months to every six months. And third, government efficiency. With Medicaid accounting for up to a fifth of some of these states’ budgets, it is essential for this program to receive the right tools and the right data in order to get the benefits to those who need it the most.”

Duplicate or cross-state enrollments pose one of the most significant risks under the new rules. A recent Centers for Medicare & Medicaid Services analysis found approximately $14 billion in wasted funds tied to duplicate enrollments. Bejarano noted that “data silos between agencies, legacy systems and inconsistent identity verification steps” have allowed individuals to be processed multiple times. He emphasized that states must adopt front-end identity proofing, cross-program data matching and fraud analytics to stop waste at the outset rather than during costly audits months later.

For Greg Schlichter, director of research and consulting at TransUnion, the most pressing challenge is the shift to semiannual eligibility checks. “It’s going to be a challenge to handle more frequent checks, certainly from a timeliness perspective,” he says. “You don’t want to delay a decision on somebody’s coverage, but that needs to be balanced against fraud considerations.”

Schlichter also highlighted how the growth of nontraditional employment complicates income verification. “Most agencies rely on legacy data providers… but the labor market now skews more towards gig workers and freelancers,” he says. To keep pace, Schlichter advised agencies to segment high-risk cases early, ensuring staff have the correct data to act quickly without creating bottlenecks.

The changes are also likely to flood contact centers with confused beneficiaries. Schlichter urged agencies to invest in proactive outreach and smarter call-routing tools. “Even saving 30 seconds a call can add up to a significant amount of time savings if you’re dealing with tens of thousands of calls a week,” he says, pointing to innovations like device intelligence and AI-enabled triage.

Moving forward, Bejarano said emerging technologies can help agencies adapt quickly while laying the foundation for resilient Medicaid programs. “FedRAMP-ready solutions… give agencies the confidence that identity verification and fraud prevention meet the highest federal security standards,” he says. “That means states will be able to not only streamline their eligibility process, but also build a Medicaid program that is efficient, resilient and trusted into the future.”

Learn how TransUnion’s identity solutions help states deliver more effective services and reduce fraud risk.

This video panel discussion was produced by Scoop News Group for StateScoop and underwritten by TransUnion.