r/Medicaid • u/someguy984 • Jun 02 '26
HHS/CMS issues interim final rule for the 2027 Medicaid community engagement requirement
This interim final rule with comment period (IFC) interprets and implements the community engagement requirement in Medicaid.
https://public-inspection.federalregister.gov/2026-11094.pdf
CMS press release:
6/26/2026 update, CMS published an additional document in the Federal Register:
Community Engagement Requirement for Certain Individuals
https://public-inspection.federalregister.gov/C1-2026-11094.pdf
Chart showing changes due to the new requirements...
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u/someguy984 Jun 02 '26
Looks like the $580 income doesn't have to be earned income to satisfy the requirement. Any income counts.
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u/Big-Aioli8125 Jun 03 '26
So it seems like this only targets people who either literally have almost no income to speak of or who's English/cognition is so bad that they can't navigate the paperwork.
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u/Mindless_Proposal777 Aug 31 '26
I had no income up until I just was put on retirement, starting next month.
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u/wtjc Jun 06 '26
Maybe a stupid question but would interest income apply since it is counted as income for MAGI Medicaid eligibility?
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u/someguy984 Jun 06 '26
Yes.
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u/wtjc Jun 06 '26
Would interest income from a joint bank account then be split in half and applied toward the $580 for each individual? Or would it only apply in full toward the primary account owner? I can't recall how it works for the MAGI Medicaid application.
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u/badfordabidness Jun 13 '26
If both individuals are in the same MAGI tax household (e.g., a married couple living together), the whole amount would be counted for the household, and all applicable individuals in the household would be treated as compliant based off the $580. (It is $580 total for the whole household that is required, not $580 per person.)
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u/StitchinStatistician Jul 07 '26
This didnât sound right to me, but I re-read the applicable section of the proposed rule and I agree with this interpretation. I had to read it several times to get my head around it. Thank you for explaining it!
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u/Vivid_Dot2869 Aug 23 '26
what about if I loan someone money and they pay me back, would that count?
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u/Vivid_Dot2869 Jul 27 '26
But if someone's on Medicaid they likely aren't making much money in interest. I think I make like maybe $20 or $30 a year between interest and dividends
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u/someguy984 Jul 29 '26
The expansion group sets no limits on assets/resources so it is entirely possible to have substantial interest income and still qualify.
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u/badfordabidness Jun 14 '26
Iâm really glad this made it in! This is something a lot of folks have been advocating for/speculating about for a while now, and some have been quietly pointing out since shortly after HR1/OBBBA/WFTC passed that itâs what the (rather convoluted) text of the Social Security Act requires.
One interesting effect of this that i donât think folks have really explored â this will make it pretty rare for custodial parents of children under 18 to lose access to Medicaid due to CER.
CER only applies to the adult expansion category, not the legacy Medicaid category for parents/caregivers. In many states, that legacy category has an income limit thatâs close to â or even above â $580/month of MAGI income (note: this is not universally true in all states, since there isnât one nationwide FPL level for that category).
In such states, that would mean even if the child in the household didnât qualify their parent for the CER exclusion for caring for a child under 14, the parent would still effectively never be at risk of losing eligibility due to CER.
For instance, in my home state of PA, letâs say you were a parent with one 16-year old kid. Youâre not excluded from CER because your kid is over 13. But if your MAGI household income is under $591, CER doesnât apply to you because youâre in the parent/caretaker Medicaid category, not the adult expansion category. And if your MAGI household income is over $591, youâre in the adult expansion category, but youâre by definition satisfying the CER requirement because $591 > $580, and the same definition of MAGI household income is used for the $580.
So even though the law says parents are only exempt if their kids are under 14, in a lot of states, the de facto rule will be youâre essentially exempt as long as your kid is under 18.
Thereâs a similar effect for seniors. While the law technically only exempts seniors age 65 and older, we know older Medicaid recipients often opt to get social security earlier (you can claim as early as 62). And those benefits are almost always more than $580 per month, and even though theyâre unearned, theyâre counted in MAGI and will thus be treated as establishing compliance with CER. So in practice, I think itâll be rare to see many 62-64 year olds lose eligibility for Medicaid due to CER.
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u/HorrorOk1304 Jun 26 '26
What's interesting is that this actually makes raising the federal minimum wage a bad idea as it would increase the minimum income needed to keep Medicaid.
This law is actually generous to the states that have a higher minimum wage as its easier to make $580 a month.
In states like NY you only need to work about 35 hours a month.
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u/Vivid_Dot2869 Jul 27 '26
I wonder if part of the reason for that is that Congress wants to make it harder for a future Congress to raise the minimum wage.
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u/HorrorOk1304 Jul 30 '26
Its always been difficult for Congress to raise the minimum wage as the cost of living varies widely from state to state.
Most states already have a minimum wage that is already higher than the federal rate so there is little incentive for them to support.
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u/Resident_Jellyfish31 Jun 02 '26
Can you point me to where in the document they mention this please?
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u/someguy984 Jun 02 '26
Page 41 on down.
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u/Resident_Jellyfish31 Jun 02 '26
So they will use MAGI income? Does that mean 401k withdrawals count? Also, Gifts wouldnât count correct?
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u/someguy984 Jun 02 '26
Yes, Roth conversions, 401K withdrawals are income, gifts are not.
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Jun 03 '26 edited Jun 03 '26
[removed] â view removed comment
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u/someguy984 Jun 03 '26
Sorry, no AI slop here, I replaced your post with a MAGI guide, see below:
https://laborcenter.berkeley.edu/wp-content/uploads/2021/03/2021-03-MAGI-Summary.pdf
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u/One-Seat-4600 12d ago
It later says âearned incomeâ. Capital gains donât count
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u/someguy984 12d ago
Federal CMS rule states MAGI income. MAGI income is very inclusive, it includes realized gains, pensions, Social Security.
"Under new § 435.552(f)(2) and (g)(3), we establish that States must use the MAGI-based methodologies at § 435.603 when making income determinations for demonstrating community engagement. A contrary reading of the statute would require that States, after determining an individual income-eligible for the adult group, apply a separate and distinct income determination for such individuals in evaluating their demonstration of community engagement. There is no indication in section 1902(xx)(2) of the Act or elsewhere that the MAGI-based income provisions of section 1902(e)(14)(A) of the Act should not apply to the calculations under section 1902(xx)(2)(F) and (G) of the Act. Therefore, under § 435.552, we are interpreting section 1902(xx)(2)(F) and (G) of the Act in a manner that is consistent with section 1902(e)(14) of the Act. We specify that States must use the individualâs MAGI-based income as defined at § 435.603 in assessing an individualâs monthly income for the purpose of determining if an individual demonstrates community engagement under § 435.552(f) or (g)."
https://public-inspection.federalregister.gov/2026-11094.pdf
NY confirms it, "earned income" is NOT a requirement.
"What types of income count toward the $580 monthly income amount needed to meet the requirements?
Income that will count includes:
Taxable wages (from your job) Self-employment income, like owning your own business or contractor work Gig work income, like DoorDash or Uber Tips Unemployment payments Social Security income Social Security Disability Income (SSDI) Retirement or pension income Certain investment, rental, or other taxable income "2
u/Vivid_Dot2869 Jul 27 '26
so if it's $580 a month, how do they determine monthly income? Do they look at your annual taxes and divide by $12?
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u/someguy984 Jul 27 '26
All Medicaid is monthly based income.
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u/Internal-Yard-3515 Aug 26 '26
Going to be a lot of hand calculations for people that are living on savings and have to make sure they have enough capital gains each month
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u/NeoBasilisk 3d ago
Are we still feeling confident on this interpretation? Has anyone talked to case workers and confirmed that this is how it is being implemented?
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u/wtjc Jun 06 '26 edited Jun 06 '26
The "medically frail" and "serious or complex medical condition" definitions part is very confusing. This KFF article explains it some. How are they going to sort this out before 2027 and how are we going to know the details about our specific state?
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u/mother_octopus1 Jun 09 '26
Do Social Security Survivors benefits count as income for the $580 exemption?
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u/Abangyarudo Jun 02 '26
I haven't read fully through it. The little targeted todbits I did read there is some odd stuff they never talked about before or changes some things operationaly. I dislike they kept the over-complicated caregiving framework from the 5/1 cmcs meeting where caregiving is now a exclusion in some cases and a qualifying activity in others.
Another odd thing is that in traditional educational scenarios they suggest using a calculation for credit hour while in the case of non-traditional doing a direct hour to hour calculation. So a win for those clients in those settings but it feels like something we should have been told months ago if that was their plan.
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u/badfordabidness Jun 13 '26
I also question their rationale for *not* allowing the same/a similar calculation for non-traditional students (e.g., classroom hours times 3, instead of credit hours times 3).
They suggest their approach disallowing this was meant to align with SNAP and TANF rules, however SNAP regulations have long allowed states great flexibility to count âpreparatoryâ activities for work requirement compliance purposes, regardless of whether an educational activity was traditional or non-traditional. See: FNS 2001 ABAWD Final Rule at 66 FR 4459, quoted below.
âWe proposed that an individual could combine work and participation in a work program to meet the 20 hours per week requirement. The majority of the commenters supported this proposal. One commenter suggested that we clarify in the regulations that time spent off-site preparing for E & T activities count towards meeting the requirements. This is up to the State agency. If the State Agency recognizes such activities for E & T purposes then the individual is fulfilling the work requirement.â
Based on this, Iâm not sure that CMSâ rationale for allowing a formula for traditional education and not allowing a formula for non-traditional education is consistent with SNAP rules. Which would be fine â Medicaid is a different program after all â if CMS hadnât explicitly argued for their counting scheme on the basis it aligns with SNAP rules.
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u/wtjc Jun 08 '26
Another question about the work requirement exemptions. If you get an exemption for a medical condition, will they then say that means you're disabled and you have to apply for non-MAGI Medicaid which has asset limits instead of income-based MAGI Medicaid which does not?
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u/Blossom73 Jun 08 '26
No. Disabled people can remain on Magi Medicaid if they're not receiving SSI or Medicare, or applying for long term care Medicaid.
There's no requirement to apply for SSI or SSDI to stay on Magi Medicaid.
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u/badfordabidness Jun 13 '26
Itâs possible a state may move someone from a MAGI to a non-MAGI category based on a newly discovered medical condition, but thereâs no hard and fast rule (this may happen in some scenarios, not all).
Also, if for some reason you donât meet the financial requirements for the non-MAGI category (e.g., due to excess assets), you are always allowed to âfall backâ on the MAGI category.
In other words, identifying the medical condition shouldnât cause you to lose Medicaid eligibility altogether. You may be moved to another category *if* youâre eligible for it, but if not, you will stay in the Adult Expansion category.
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u/wtjc Jun 15 '26
That's good to hear. Still waiting for the state rules. Hope they make things clear soon.
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u/Vivid_Dot2869 Aug 25 '26
So If I'm reading the bottom chart (from families usa) correctly, a person already on Medicaid can pick which month (within the look-back period?) to prove that he met the requirements (Page 11, the first block under "III. Demonstrating compliance"? So in theory we are supposed to meet the requirements every month, but get to pick what month we use to prove it? So a single month falling short shouldn't be enough to kick us off unless the state we live in wants to be a jerk?
But we can also "prove" by self-attestation up until 2028?
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u/Vivid_Dot2869 Jul 27 '26
When you say "interim final rule" does this mean people can comment on the rule?
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u/Weekly-Mobile426 Aug 25 '26
Good morning all,
I was in an auto accident in January of this year. I suffered a brain bleed and lots of broken bones. My bones have healed. However I still suffer nasty vertigo, memory loss, and nausea that comes with the vertigo. I am taking my meds as prescribed. I am still in PT twice a week to strengthen my body. After a PT appointment I am wiped out for at least a day. The ringing has not stopped in my ears. I am on meclizine and scopolamine patches.
I was terminated last month. I tried to apply for Obama care and it tossed me to Medicaid in which I qualified. My wife is on social security and I have no job. Doctors encouraged me to apply for disability. I did.
Am I considered frail? I really can't work with vertigo and all that comes with it. I have been prescribed a walker for bad days and a cane for better days.
I have not received my Medicaid card yet.
Brian in NC
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u/Vivid_Dot2869 27d ago
One thing I'm wondering, if you go the $580 a month income route, how do you "show" that you made this much? Especially if some of that income is cash
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u/Vivid_Dot2869 27d ago
- If you are in college at least half-time you're exempt, but is this only during months with a semester, do you lose this exemption during Summer Months and Christmas break? 2. If you go less than half-time, can you count the education time towards the 80 hours?
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u/Altruistic-Job5086 Aug 12 '26
The Families USA chart is locked it says.
I have a question. My job is seasonal (outside work) and during the winter for 2.5 to 3 months there's no work. During that time I apply for Unemployment Compensation and get that and I have a "return to work" letter and date from my employer. In PA. How does this work with the new Medicaid rules that go into effect next year? I also have some SNAP monthly. Also have some LIHEAP every year.
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27d ago edited 27d ago
[removed] â view removed comment
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u/Medicaid-ModTeam 26d ago
Providing inaccurate information as a means of confusing or misleading information is not okay.
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u/logalogalogalog_ Jun 08 '26
I feel like people are being very dismissive regarding disability requirements. What if someone does not qualify for disability or is in the process of the grueling years-long process of applying, but still cannot work or volunteer the hours to qualify? What "counts" as disabled enough? Is it subjective based on local staff, or is there going to be more restrictive qualifications? It doesn't help that a lot of people who are disabled but haven't gotten disability yet need Medicaid in order to get the medical records to qualify. This is going to destroy people's lives.