The underreported challenges health plans face — and the innovative solutions they’re developing to keep members covered

ATLANTA --(BUSINESS WIRE)

As Congress’s sweeping HR1 (One Big Beautiful Bill Act) moves toward implementation, MedZed, a provider of health-related needs services for Medicaid members and dual-eligible Medicaid and Medicare members, has released a qualitative report offering an unfiltered look at how the 2025–2026 Medicaid reforms could reshape the healthcare landscape.

Drawing on in-depth interviews with senior executives from managed care organizations in both East and West Coast markets, the company’s report, Inside the Medicaid Shake-Up: What Health Plan Leaders See Coming, details unprecedented risks to coverage stability, provider capacity, and care continuity — and outlines practical solutions from the field.

“The stakes go far beyond budget lines or churn statistics,” said MedZed co-founder and Chief Executive Officer Scott Schnell. “Our conversations with health plan leaders make it clear: without swift, coordinated action, these changes could destabilize access to care for millions while straining an already stretched safety net.”

Beyond the Headlines: The Real Story Inside the Medicaid Shake-Up: While much of the national conversation has focused on predictable outcomes like churn, coverage loss, and uncompensated care, health plan leaders told MedZed that the biggest threats may be the ones no one is talking about — the deep, under-the-radar operational problems that could quietly dismantle parts of the system.

The “quality-metrics math problem,” as one participant calls it, was top of mind when considering HR1 (One Big Beautiful Bill Act). Plans are being held to performance targets they cannot mathematically meet when roughly 40% of members never engage with care — despite millions spent trying to reach them. “We spend millions trying to engage the unengaged and we gain very little,” one leader explained. “Then we get penalized because we can't meet our quality measures. This will only get worse under the new rules.”

Leaders also stressed that trust is the hidden currency of care. Benefits alone do not improve outcomes — relationships do.

“People do things for people and organizations they trust,” one participant said. “If they don’t trust you, they won’t do what you ask, and no policy change will fix that.”

Another looming issue regarding HR1 (One Big Beautiful Bill Act) is the redetermination ‘double hit.’ Under the new six-month eligibility cycles (from the standard annual eligibility cycles), members lose coverage, return sicker, and force care plans to reset — doubling costs and undermining quality.

“Every time someone falls off and comes back, their care is disrupted, and costs go up,” said a participant.

Financial strain adds to the danger. Leaders warned that unsustainable reimbursement rates could push providers out of networks overnight.

“If we can’t sustain rates, providers will walk away — and members lose access instantly,” one leader said.

And even well-intentioned mandates can cause harm. Some states are requiring costly programs, like annual Social Determinants of Health screenings for all members, even when individuals may only remain enrolled for a few months.

“We’re being asked to build systems for requirements that may outlast members’ enrollment by only weeks,” a participant added.

The Expected — and just as Serious — Risks: Alongside these underreported dangers, participants acknowledged more widely discussed — but still critical — challenges related to HR1 (One Big Beautiful Bill Act). Six-month eligibility redeterminations are expected to destabilize coverage and overwhelm administrative systems. Leaders foresee immediate enrollment drops among undocumented individuals and ACA expansion populations, creating funding shortfalls and disrupting care. As members fall off the rolls, many will return as uninsured patients, increasing uncompensated care burdens. Work requirements may disqualify people who are already caretaking or lack access to jobs, broadband, or transportation. And the churn of losing and regaining coverage will interrupt care plans, worsen conditions, and drive up costs.

“We lost over 50,000 members already during the unwinding post-Covid,” one leader recalled. “Many simply didn’t respond to mail or calls. We’re preparing for this to be worse.” Another participant warned: “We’re going to have to provide care to the uninsured and then bill later — it won’t be nice.”

Solutions from the Field: Despite these risks, some plans are moving quickly to adapt. In California, proactive outreach — including early access to redetermination lists, text and email reminders, and in-person assistance through Enhanced Care Management and Community Supports — is helping members renew before coverage lapses. Leaders are also implementing onboarding processes that require orientation at enrollment, timely first PCP visits, and, in some cases, small ER copays to steer patients to urgent care or primary care instead.

Access is being expanded through extended clinic hours, transportation services, and targeted provider recruitment in underserved areas. Administratively, plans are pushing for standardized prior authorization and billing rules to reduce provider friction, and building interoperable systems so care teams can see real-time member engagement across settings.

Financial resilience strategies include site-neutral payment reforms, careful oversight of high-cost hospital settings, and staged rollouts for dual-eligible plans to allow for multi-year break-even timelines. Several leaders emphasized the need to shift resources toward prevention, match social needs screenings with realistic referral capacity, and track trust-based engagement as a core performance metric.

“If we can get ahead of the redetermination wave and keep people engaged,” one participant said, “we’ll not only save coverage, we’ll save lives.”

A Call for Alignment Before It’s Too Late: The report urges policymakers, health plans, providers, and community-based organizations to align now — before the new rules take effect — to prevent avoidable destabilization and seize the opportunity for innovation, prevention, and stronger health equity.

“The next 12–24 months will decide whether these reforms become a tipping point toward systemic strain, or a catalyst for smarter, more resilient care,” Schnell said. “The leaders we spoke with are already moving fast — but they can’t do it alone.”

About MedZed:
MedZed is a provider of services and supports to address the Health-Related Social Needs (HRSNs) of high-risk, high-cost Medicaid and dual eligible Medicare members.MedZed partners with managed health plans and risk-bearing entities to identify, locate, and engage members who have complex unmet clinical and social needs, are disengaged from primary healthcare, and as a result, account for a disproportionate share of care costs. MedZed has partnered with 22 health plans across 11 states with great success. The company’s programs have decreased total medical costs by 54%, hospital admissions by 54%, and ED visits by 38% among the underserved populations it serves.

To download MedZed’s report analysis, go to: Medicaid Shake-Up: What Health Plan Leaders See Coming.

Media Contact:
Judy Brennan
JBrennan & Associates
[email protected]

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