State law change required for compliance with ‘Big Beautiful Bill’

Without multiple changes to state Medicaid law, Minnesota risks noncompliance with changes under President Donald Trump’s “Big Beautiful Bill.”

That’s the message shared Tuesday with the House Human Services Finance and Policy Committee. No action was taken.

Changes in HR1 include new work requirements, new six-month renewals, cost sharing requirements, changes to retroactive coverage, changes to eligible lawful immigration statuses, and changes to federal funding and limitations on health care taxes. The Centers for Medicare and Medicaid Services has released some preliminary guidance, but additional guidance and rulemaking is expected down the line.

Most of this will take effect Jan. 1, 2027, deadlines that are “really, really challenging for the state to meet, along with our county partners,” Department of Human Services budget director Elyse Bailey said. “We’re hoping to at least come out of session with conforming change that we need to roll out these changes and appropriations.”

[MORE: View the overview]

Additionally, both state and county officials agree that major upgrades to information technology infrastructure are paramount to success in the years to come, particularly for counties charged with determining Medicaid eligibility. 

Without system upgrades, continuity of care will be threatened, impacting the most vulnerable, said Barb Dahl, human services director for Scott County. Additionally, decentralized systems pose a risk for error, particularly when new regulation goes into effect and this comes with financial implications. Under HR1, Medicaid payment errors exceeding a 3% threshold will trigger federal financial sanctions.

[MORE: View the Association of Minnesota Counties presentation]

Complicated and dated technology systems have led to high levels of case worker burnout and attrition, officials said.

“We need a long-term modernization plan that moves Minnesota toward an integrated platform with centralized core functions, a system where eligibility workers are not bouncing back and forth between 30-year-old green screens and siloed systems, manual processes and scattered policy resources,” Dahl said.