Back to Basics: How Health Plans Are Rebuilding for H.R. 1 Under Pressure
Three panels at this year's AHIP Annual Conference kept arriving at the same uncomfortable conclusion. A tough financial environment alongside a fast-approaching January 1, 2027 deadline. The plans best positioned to navigate new requirements under the “One Big Beautiful Bill” and H.R. 1 aren't scrambling to build something new… they’re continuously building on infrastructure from the past.
Member relationships, data infrastructure, state partnerships, and community trust. The basics. It turns out the basics are now the core strategy.
This write-up summarizes the following panels at AHIP26:
- U.S. Health Care Coverage and Its Impact on the Broader Ecosystem - moderated by Liz Fowler, PhD (former CMMI and Distinguished Scholar, Johns Hopkins Bloomberg School of Public Health), with Karen Hanlon (President, Highmark Health), Dawn Maroney (President, Alignment Health and CEO, Alignment Health Plan), and Martha Santana-Chin (CEO, L.A. Care Health Plan)
- Medicaid Community Engagement: From Eligibility to Continuity of Care - moderated by Edward Sheen, MD, MPH, MBA (Chief Quality and Population Health Executive, L.A. Care Health Plan), with Alice Chen, MD, MPH (EVP and Chief Health Officer, Centene) and Jason Dees, DO (EVP and Chief Medical Officer, Molina Healthcare)
- Navigating the Next Era of Health Insurance - moderated by Drew Hobby (EVP and Chief Strategy Officer, Blue Cross of Idaho), with Lisa Erickson (CEO, Medica), Krista Hoglund (President, Jefferson Health Plans), and Eric Hunter (CEO, CareOregon)
Lessons from the PHE Unwinding
For Highmark Wholecare and L.A. Care, between thirty to forty percent of members who went through redetermination during the PHE unwinding in 2023 and 2024 lost eligibility. 70% of those lost it for procedural reasons, not because they were actually ineligible. Martha Santana-Chin, CEO of L.A. Care Health Plan, described what the aftermath looked like:
"Over time, what ended up happening is we had to go find them. Some eventually found their way into the system and re-enrolled, but others lost coverage permanently."
Karen Hanlon, President of Highmark Health, described ways that they were able to reach members and decrease churn:
"Just through digital engagement and being able to reach those members, we were able to reduce [coverage loss] by about fifteen percent."
Both talked about making investments into technology to support their members, but also emphasized close partnership with in their respective states (CA and PA).
Santana-Chin described L.A. Care's investment in daily data exchange with the local County Department of Social Services as one of the most consequential decisions they made - and one that required organizational will far before the urgency was obvious.
The data problem underneath everything
Every panel that got into H.R. 1 mechanics hit the same wall. The ex parte verification process - intended to auto-verify eligibility before a notice ever goes out to a member - depends on data that can be delayed and inconsistent.
Alice Chen, Executive Vice President and Chief Health Officer at Centene, and Jason Dees, Executive Vice President and Chief Medical Officer at Molina, were both candid about how much of the verification burden can fall back on members.
Chen started by describing the waterfall logic plans need to work through: who can you identify through existing data as likely hitting an exemption category, who do you have regular contact with, and who have you never heard from. Within that last group is where the risk concentrates:
"I'm most worried about those… medically complex folks, because if they do fall off, it's going to be much harder for them in terms of their health and their outcomes."
Even where CMS has provided guidance, documentation and attestation requirements are still being worked out. States have discretion on what they'll accept as proof, and plans are building workflows without knowing what the bar will actually be. Dees was direct about what that uncertainty means for plan operations:
"There's a whole new layer of ambiguity that our plan finance partners are going to have to navigate through as we work through this."
Chen also flagged the risks as states finalize policy and plans stand up outreach simultaneously; some members may get contacted by multiple parties while others get nothing at all.
Nebraska's approach - sending plans membership files with clear flags on members likely to meet exemptions and explicit guidance not to contact them - is the kind of state-plan coordination that makes the system work.
Growth and retention looks different when you're fighting to survive
H.R. 1 is arriving on top of balance sheets that are already stressed in ways unwinding wasn't. Eric Hunter, CEO of CareOregon, described absorbing nearly $400 million dollars in behavioral health underfunding over two years - forcing a culture shift from what he called "the safety net of the safety net" to something leaner. Krista Hoglund, CEO of Jefferson Health Plans, committed to a full Epic implementation because operating without a cohesive core system had become untenable.
What each of them described, in different ways, was the same forced discipline: get back to fundamentals before you think about growth.
For Hoglund that meant a hard first year in her role focused on the fundamentals of talent and development, expense discipline, and the right product portfolio. The strategic instinct that followed was deliberately unglamorous:
"Everyone's got a great idea for how we should grow. And it was no, we actually have a ton of opportunity in the products that we're in today and the markets that we're in today. It's a heck of a lot cheaper and easier to grow there."
Lisa Erickson, CEO of Medica, described a similar orientation. Medica took on UCare’s members in Minnesota after the regional plan wound down operations, which grew Medica’s Medicaid book significantly. The question shifted from competing on network breadth and premium price to being distinctive on the things that actually build retention.
"We win on the things that make us distinctive. And what that's been is the trusted relationships, the partnerships we build, the member experience that we create and the real feeling of caring for our members and being there for them."
Several leaders asserted that their regional plans can't out-resource national competitors. What they can do is be the trusted local presence that knows how to meet members where they are. A member who has a real relationship with their plan, who gets reached through a trusted channel when a notice arrives, who has someone to call when they don't understand a form - that member is less likely to fall off procedurally.
The plans that built retention as a financial strategy are discovering it was also an H.R. 1 strategy, whether they knew it or not.
Additionally, the administrative cost of H.R. 1 (e.g., outreach, data infrastructure, community partnerships, workforce programs) is being absorbed by plans, states, providers, and community organizations already operating under margin pressure. Santana-Chin put it plainly:
"If you rush to implement this without really thinking through the downstream consequences, you're basically going to further destabilize communities that are already struggling."
Medical frailty is where implementation gets complicated fast
Every panel that touched H.R. 1 eventually landed on medical frailty. The exemption exists, but it has two parts: a qualifying condition, and proof that the condition actually interferes with the member's ability to meet the eighty-hour requirement. Chen laid out the five categories of medical frailty:
- Blind or disabled
- Substance use disorder
- Disabling behavioral or mental health condition
- Physical or intellectual or developmental disability interfering with activities of daily living (ADLs), and
- Medically complex
She articulated the challenge of documenting eligibility:
"When you think about how we're going to capture and document what people are already doing in order to prove that they are eligible, caregiving and that piece around functionality gets really complicated. It's really hard to look at a claim or a payroll or any kind of data source that's readily accessible and quantifiable in order to say, 'Yes, you're eligible.'"
Dees pushed further into the multi-state problem. States have discretion on both the qualifying condition and the functional test. There is no national standard. A member who qualifies for medical frailty exemption in one state may not qualify in another - and plans operating across dozens of states have to build workflows that account for every variation:
"There's not a requirement that states agree on what the list is, and there's also not a requirement that they agree on how that frailty impacts your ability to do work."
For members caught in that ambiguity - medically complex but whose documentation doesn't cleanly map to a state's chosen criteria - the thirty-day clock may be unforgiving. Plans that have invested in proactive frailty identification are in a position to flag these members before a notice goes out.
Plans that haven't are managing exceptions reactively, at scale, starting January 1.
Community engagement and work requirements: what plans are actually being asked to do
Medicaid eligibility for working adult expansion populations is now tied to meeting 80 hours per month of qualifying activities - work, job training, education, or volunteering, in any combination. About 50% percent of the affected population is already working. Another 30% percent likely meet an exemption. The twenty percent in between are the operational challenge.
State variation compounds everything. Nebraska went live May 1. Montana is aiming for July. Iowa for December. Every state has nuances on look-back periods, medical frailty definitions, documentation requirements, and exemption criteria. What makes this harder than unwinding, beyond the financial pressure, is the ongoing nature. Semi-annual eligibility reviews create a continuous, rolling administrative burden - not a one-time wave that plans can resource up for and then wind down.
Hunter named the political dimension that often gets underweighted in operational planning:
"The greatest challenge in the next three or four years will be community engagement… Our task is to find a way to do everything we can to inform and educate partners and community organizations — to let people know what's going on."
What has actually worked
The clearest pragmatism across all three panels came from plans describing what they had built during unwinding and could now redeploy. A few things stood out.
Peer navigation. L.A. Care's Coverage Champions program trains former members from community advisory committees to do eligibility navigation in their own neighborhoods. The trusted messenger model has outperformed plan-only outreach for the hardest-to-reach members.
Provider embedding. Centene placed community benefit navigators inside community health centers in Nebraska, using plan data to drive targeting but relying on trusted local partners for the last mile. Members who don't respond to plan outreach often do respond to someone they already have a relationship with at a place they already go.
Eligibility enrollment partnerships. During redeterminations, Centene partnered with the Salvation Army as an actual eligibility enroller - creating one-stop shopping for members who needed to both understand and act on their coverage situation in the same visit.
Unexpected touchpoints. Dees made the case for pharmacies:
"People love their pharmacist, and they are likely to be there every month. What a great opportunity to send a quick message to the pharmacist: 'This person could be involved in community engagement — make sure they are notified to watch their mail.'"
Wrapping outreach with action. Centene’s work in Georgia was the most concrete illustration of what separates outreach that works from outreach that doesn't:
"Education is necessary but not sufficient. You have to give someone a tangible action to do. In Georgia, we stood up a network of ninety community partners across the state who actually offered job training, education, assistance with Pell Grants, or volunteering, and we wrapped around them with drivers of health.”
H.R. 1 will not affect all plans equally. It will hit hardest the plans that don't know where their members are, can't reach them through trusted channels, have incomplete data exchange with state partners, and are entering 2027 with margins that can't absorb disenrollment.
Just like what happened during the PHE unwinding, actuaries and policy experts expect plans to lose healthy members and retain complex ones.
Research found that the unwinding created a severe case of adverse selection — the tendency of healthier individuals to drop Medicaid coverage while sicker individuals fight to keep it. H.R. 1 is poised to repeat that dynamic, which means the financial and operational challenge is one and the same.
Regardless of state and politics, the organizations that navigate this next year successfully will deepen member relationships, fortify data infrastructure, and commit to community partnerships as operational investments.
The basics were always the strategy. H.R. 1 is the forcing function to re-evaluate and re-invest in them.
