State governors, including Oregon’s, call for more time to implement new Medicaid rules

With just three months left to prepare before complex new Medicaid reporting and eligibility rules take effect, Oregon’s Gov. Tina Kotek is again leading a group of governors seeking an extended timeline.

In a letter Thursday, Kotek and the governors of California, Maine, New York and Virginia called on Health and Human Services Director Robert F. Kennedy Jr. to delay the Jan. 1 implementation of new Medicaid requirements passed by Congressional Republicans in their massive 2025 tax and spending bill.

It follows a May 29 letter Kotek and the governors sent to Kennedy urgently asking for more time after he and human services officials issued final rules that contradicted earlier rules sent to states in January, and fundamentally changed the definition of medical frailty in Medicaid eligibility. The final rules issued by Kennedy six months after initial guidance was given to states required changes to forms and verification processes that states had already been working on for more than a year, according to the governors.

“These are not minor or technical adjustments. They fundamentally change the processes and system logic underlying states’ implementation plans. With less than 100 days remaining before January 1, states cannot reasonably rebuild, test and validate these systems while ensuring accurate notices, properly trained workers and reliable, lawful coverage determinations,” the governors wrote.

Kennedy, Human Services officials and the Trump Administration ignored the governors’ requests, according to Kotek’s office. Spokespersons for the agency did not immediately respond to a request for comment from the Capital Chronicle.

The new requirements passed by Republicans — including requirements that nondisabled enrollees aged 19 to 64 prove they are working, volunteering or in school at least 80 hours a month — have already caused enrollment errors and are expected to leave 5 million people without healthcare coverage by 2034 according to the nonpartisan Congressional Budget Office. About half of that is expected to be caused by paperwork errors and reporting failures, the office found.

In Oregon, big grocery, retail companies have highest number of employees on Medicaid

“One-third of Oregon families — including seniors, disabled Oregonians, and children — rely on Medicaid, which is the Oregon Health Plan,” Kotek said in a news release. “The new rules institute additional administrative barriers that will lead to people losing their healthcare. That is why we are proactively getting information out to families and providers now and rapidly training eligibility workers as we coordinate our response to the changes across the state.”

The governors lay out the consequences for Kennedy in the letter via the experience Arkansas had in 2018 with similar Medicaid requirements. A study published in the New England Journal of Medicine found that 95% of people who lost their Medicaid coverage were later found to have qualified for an exemption.

The governors reiterated that they hold different values related to healthcare coverage and Medicaid than Kennedy, especially that it be related to income and not employment, but that they still expect him to humanely roll out new regulations.

“Despite our policy disagreement, we have never allowed it to interfere with our obligation to implement the law Congress enacted. What has made timely implementation unreasonable is the Department’s decision to depart from the statute and its prior guidance at this late stage, without giving states sufficient time to adjust,” they wrote.

They said they are not asking for an infinite delay, but a delay until states show they have all systems in place needed to assure under the new rules that Medicaid enrollees data is protected and that their coverage is assured.