The One Big Beautiful Bill Act is Here: Preparing for Medicaid Churn Ahead

Major changes are underway for the Medicaid program, but the most significant disruption is still on the horizon.

After the end of the Public Health Emergency, Medicaid redetermination reshaped coverage nationwide, with an estimated 25 million people losing eligibility. Now, with the One Big Beautiful Bill Act (OBBBA) signed into law in July 2025, the next phase of Medicaid transformation has begun. While many of its provisions are already in motion, the largest impacts on Medicaid coverage stability are expected to accelerate toward the end of 2026 and beyond.

For providers, 2026 is not the year churn peaks. It is the year to prepare.

OBBBA represents one of the most sweeping sets of Medicaid policy changes in more than a decade. Last year, much of the industry discussed it as a future possibility. Today, it is settled law. The question is no longer if Medicaid workflows will change, but whether health systems are ready before those changes fully take effect.

Hospitals, health systems, specialty practices, and clinics will all feel the operational impact. While compliance deadlines and reporting requirements are already beginning to surface, the most consequential coverage disruptions are still ahead. Organizations that use 2026 to modernize eligibility workflows will be far better positioned when churn accelerates.

Medicaid Churn: A Growing Risk, Not Yet at Its Peak

Medicaid churn occurs in the period of time when a patient loses and regains Medicaid coverage rather than maintaining continuous coverage. If a patient is not enrolled in Medicaid at the time of service but re-enrolls later, it’s much more difficult for hospitals to ensure the account is settled.

Churn was already an issue before OBBBA, but it mainly stemmed from factors like income fluctuation, employment changes and other life circumstances. It intensified during redetermination starting in 2022. OBBBA introduces additional structural changes that are expected to increase churn over time, particularly as new requirements reach full enforcement.

While widespread churn is not expected to crest until late 2026 and into 2027, early signals are already visible. Providers that wait for churn to spike before adjusting their revenue cycle processes will be reacting too late.

How OBBBA Will Increase Medicaid Coverage Instability

OBBBA is a massive spending bill covering everything from agriculture to defense, but it outlines several key Medicaid provisions expected to drive churn.

Work Requirements

Under OBBBA, adult patients must show proof they participate at least 80 hours each month in a qualifying activity. They could volunteer, work or go to school full time, but they must provide proof before renewing Medicaid coverage. Adding more paperwork to the enrollment process complicates the workflow and gives patients and providers another administrative task to handle. If patients don’t know how to provide this (or don’t know they have to provide it at all), they risk procedural disenrollment rather than true ineligibility.

Retroactive Eligibility Changes

Prior to OBBBA, providers were able to retroactively apply coverage to any services provided up to three months before the patient enrolled in Medicaid. If a patient came in for service in June and received coverage in August, the services in June were eligible for coverage with Medicaid dollars. New requirements shorten the retroactive coverage period significantly, with some patients allowed only 30 days of retroactive eligibility. Under these new rules, the hypothetical patient’s June visit would not be covered by an August enrollment, and the original services must be written off as bad debt and a loss to the hospital.

Reenrollment Frequency

Traditionally (excepting the public health emergency), Medicaid patients reapplied for coverage every year. Now, some patients covered by Medicaid expansion must reapply every six months. The enrollment process is a heavy administrative lift for patients and providers. For patients, they must either keep track of enrollment schedules or keep their contact information up to date to receive notice of reenrollment. For providers, this means a heavier lift tracking down expansion patients and making sure all their paperwork is in order for reenrollment twice every year.

These changes are already being phased in, but their full impact on churn and denials will compound over time. It’s projected that millions will lose coverage over the next decade from procedural disenrollments.  Hospitals and health systems that foresee the major administrative burden and prepare for a heavier operational lift are best positioned to succeed in 2026 and beyond.

Why 2026 Is the Year to Strengthen Medicaid Eligibility Monitoring

OBBBA is no longer theoretical. The policy foundation is in place, and coverage instability is building gradually. For revenue cycle leaders, this makes 2026 a critical preparation window.

Manual eligibility checks are not sufficient in an environment where coverage can change between scheduling, service, and payer adjudication. RCM teams need continuous visibility into Medicaid eligibility status to prevent revenue leakage before churn intensifies.

Automated Medicaid monitoring enables providers to:

Capture Retroactive Coverage Quickly

As retroactive windows shrink, speed matters. Automated monitoring can identify newly active coverage far faster than manual workflows, helping providers recover reimbursement before deadlines close.

Reduce Downstream Denials

Coverage shifts between plan types or lapses between eligibility checks often go unnoticed until claims deny. Continuous monitoring alerts teams to changes as they happen, allowing earlier intervention.

Protect Revenue Cycle Integrity

Small revenue leaks add up. Tools like Medicaid monitoring show patterns and gaps in the revenue cycle before the leaks become a flood. Automating financial defenses is critical when financial pressure is already tight (and is only expected to grow).

Best Practices for Medicaid Roster Monitoring in 2026

As providers prepare for late-2026 churn, leading organizations are already:

• Running automated eligibility checks at least monthly

• Tracking plan-type changes that affect reimbursement

• Using tools that require minimal IT involvement

• Supporting patients through reenrollment when coverage lapses

• Staying ahead of OBBBA compliance timelines

How Office Ally Supports Proactive Medicaid Monitoring

Office Ally’s Medicaid Roster Monitoring, powered by Insurance Discovery, is designed to identify and flag unknown Medicaid coverage, helping providers capture retroactive eligibility, reduce denials and secure reimbursements. Office Ally helps organizations prepare for the next phase of Medicaid disruption without complex implementations or IT lift.

Learn more about Medicaid Roster Monitoring.

Preparing Now Prevents Revenue Loss  

Medicaid churn is not peaking yet, but it is coming. Coverage rules are tightening, administrative requirements are increasing, and eligibility stability will continue to decline as OBBBA provisions mature.

Organizations that treat 2026 as a preparation year will be far better positioned for fiscal stability in 2027 and beyond. Continuous, automated Medicaid monitoring is no longer just a best practice. It is a foundational safeguard for the modern revenue cycle.

Learn more about Medicaid Roster Monitoring from Office Ally and prepare your organization for what’s ahead.