Recent federal changes to Medicaid are expected to disrupt coverage for millions of beneficiaries. While some individuals will no longer qualify for Medicaid, others who remain eligible may lose coverage because of renewal and administrative requirements—sometimes without realizing it. Presumptive eligibility offers providers and healthcare systems one strategy to help maintain continuity of coverage while reducing interruptions in patient care and reimbursement.
Changes in Federal Requirements Will Lead to Potential Loss of Medicaid Coverage
The One Big Beautiful Bill Act (Public Law 119-21), which was signed into law on July 4, 2025, introduced several changes to Medicaid, including new eligibility, enrollment, and program integrity requirements. According to KFF, the law’s Medicaid provisions are projected to reduce Medicaid enrollment by approximately 10.3 million people by 2034. Those reductions reflect both individuals who will no longer qualify for Medicaid under the new requirements and others who remain eligible but are expected to knowingly or unknowingly lose coverage because of renewal and administrative requirements.
On June 1, 2026, the Centers for Medicare & Medicaid Services (CMS) released the Medicaid Program: Community Engagement Requirement for Certain Individuals interim final rule with comment period, which implements the community engagement requirements included in Public Law 119-21. As Lexi Hartranft has previously discussed, implementing this rule will have significant implications for Medicaid beneficiaries and the hospitals and providers that serve them. CMS estimates the provisions of the rule would likely cause 2.3 million people to lose Medicaid coverage in FY 2027 and 3.1 to 3.3 million individuals annually thereafter. According to CMS, 43 percent of these losses would be due to administrative or procedural reasons.[1] Presumptive eligibility is one strategy providers should consider to mitigate some of these effects.
What is Presumptive Eligibility?
Presumptive eligibility allows healthcare providers to grant temporary and immediate Medicaid coverage to individuals who are likely to qualify for Medicaid based on the eligibility requirements within their state Medicaid program.[2] It not only helps individuals maintain access to services but also allows providers to receive Medicaid payment during the temporary coverage period.
There are two main types of presumptive eligibility: general and hospital. General presumptive eligibility is an option provided by a state that temporarily provides Medicaid coverage to pregnant women and children who are likely to qualify for Medicaid. Hospital presumptive eligibility, which was introduced in 2014 under the Affordable Care Act, allows hospitals to make presumptive eligibility determinations regardless of whether a state has adopted a general presumptive eligibility program. Each type has slightly different eligible populations and other requirements.
General Presumptive Eligibility
For general presumptive eligibility, states have the flexibility to determine whether they will adopt and establish a program in Medicaid or CHIP, and if so, for which of the eligible populations. Additionally, a state may choose to extend presumptive eligibility to parents and caretaker relatives, former foster youth, and adult expansion groups.[3] Separately, states may opt to provide presumptive eligibility to certain individuals for family planning services and certain individuals needing treatment for breast or cervical cancer.[4] After establishing the program, states must identify and authorize qualified entities to make presumptive eligibility determinations.
Hospital Presumptive Eligibility
While all states are required to implement hospital presumptive eligibility, states have flexibility in setting requirements such as application procedures, information collected from patients (beyond income), and whether hospitals must provide Medicaid enrollment support after care is delivered. Eligible populations include pregnant women and children under age 19, parents and caretaker relatives, former foster youth, adult groups, individuals eligible for Family Planning Services, certain individuals needing treatment for breast or cervical cancer—for populations covered by the state, regardless of whether the state has adopted General presumptive eligibility for these populations.[5]
Duration of Coverage
Temporary coverage lasts for up to 60 days, beginning the day the individual is deemed presumptively eligible. Coverage is continued based on the submission of a full Medicaid application. For individuals who do not submit a full Medicaid application, coverage ends the last day of the month following the month in which they were deemed presumptively eligible. Individuals submitting a full Medicaid application are covered until Medicaid eligibility is approved or denied.
An individual is limited to one presumptive eligibility period per calendar year, and a pregnant individual is limited to one presumptive eligibility period per pregnancy, though more specific timelines may vary further by state.
These limits are intended to reduce the potential for prolonged temporary coverage while encouraging timely submission of a full Medicaid application.
Presumptive Eligibility Reducing Uncompensated Care
Presumptive eligibility programs can be an important option for hospitals and other healthcare providers seeking to maintain financial stability while promoting patient access to care. This is particularly important at this time as providers are facing the dual challenge of rising uncompensated care anticipated with the implementation of Public Law 119-21 Medicaid provisions coupled with reimbursement reductions in the Calendar Year 2027 Outpatient Prospective Payment System (OPPS) rule.
Beyond supporting covered entities, Medicaid presumptive eligibility is also important for patients themselves. Many may not be familiar with Medicaid’s eligibility requirements and assume they do not qualify. As requirements change, some could mistakenly believe they are already enrolled only to discover that their coverage ended once they arrive at the physician’s office or hospital for needed care. Presumptive eligibility gives these patients the chance to receive care while their eligibility is formally determined.
Properly implemented, these programs can play an important role in supporting the financial stability of hospitals and health systems, while also improving patient access.
Action Steps and Considerations
Providers, hospitals, and health systems interested in implementing a presumptive eligibility program should complete several key preparatory steps. They should first confirm that they meet their state’s criteria to qualify as a “qualified entity” and understand the state-specific policies governing presumptive eligibility determinations. They should also establish processes to ensure those determinations are made accurately and in compliance with applicable state and federal requirements.
Hospitals seeking to offer hospital presumptive eligibility should notify their state Medicaid agency and complete any required training and certification before implementing the program. They should also become familiar with the patient populations eligible for presumptive eligibility in their state and consider integrating eligibility screening into existing workflows.
Finally, hospitals and health systems may also want to develop or strengthen their Medicaid enrollment assistance programs to help patients transition from temporary coverage granted under presumptive eligibility to full Medicaid enrollment. Actions hospitals could take include making paper and online applications readily available and assisting patients with completing and submitting them, as this takes pressure off the patient, reduces coverage disruptions, and helps ensure continuity of care.
As the Medicaid requirements of Public Law 119-21 take effect in 2027 and 2028, presumptive eligibility programs can provide qualified providers and hospitals with one strategy to support financial stability while promoting patient access to care. Applied Policy is available to assist hospitals, healthcare systems, and other providers in navigating the presumptive eligibility requirements of individual states.
[1] https://www.federalregister.gov/documents/2026/06/03/2026-11094/medicaid-program-community-engagement-requirement-for-certain-individuals
[2] 42 CFR Part 435 Subpart L — Options for Coverage of Special Groups under Presumptive Eligibility
[3] 1920(e) and 435.1103(b)
[4] 435.1103(c)(1)
[5] 1902(a)(47)(B) and 435.1110(a)
