Modernizing Medicaid Renewals in 2027: A Member Retention Strategy for MCOs

What's Changing and Why It Matters?

Starting January 1, 2027, states must enforce new federal Medicaid work requirements for expansion adults, and renewals for that group move from once a year to at least every six months.

For a Medicaid managed care organization (MCO), every member who misses a renewal drops off the roster, along with the capitation payment, care plan, and quality history attached to them.

The work lands on member services, care management, and outreach teams. MCOs can prepare now by identifying at-risk members early, keeping contact data current, and reaching members before the state sends notice.

For health plans, redetermination has never been just an eligibility event. It is a membership event. When renewals double in frequency, and new documentation rules arrive at the same time, the number of points where a still-eligible member can fall off the rolls rises sharply.

Most members who lose coverage still need care. They stop being your members, and they often come back months later, sicker and harder to manage.

When Members Lose Coverage, the Plan Loses the Member

Most Medicaid members get care through managed care. As of July 2024, about 66.5 million people, or 78% of all Medicaid enrollees, were in comprehensive risk-based MCOs. Any change to how eligibility is checked runs straight through the health plans that serve them.

The unwinding of pandemic-era continuous enrollment showed what is at stake. More than 25 million people were disenrolled, and 69% lost coverage for procedural reasons: an outdated address, a notice that never arrived, or a renewal packet not returned in time. Many of those members were still eligible.

For an MCO, each of those cases plays out the same way. The capitation payment stops. The care manager loses contact. Open care gaps stay open. When the member re-enrolls weeks or months later, the plan pays again to find, re-engage, and re-assess someone it already knew.

No one knows exactly how the 2027 rules will play out in each state. But MCOs already face a clear question: how do you reach every at-risk member before their renewal date, without asking member services and care management teams to absorb a second unwinding?

What Will Change in 2027

Two federal changes under H.R. 1 reach the Medicaid expansion adults that many MCOs serve. First, states must renew eligibility for most of this group every six months instead of every twelve. Second, CMS's interim final rule requires states to enforce a work requirement by January 1, 2027. CMS says 43 states and the District of Columbia cover this population and must implement it.

The expansion group includes non-pregnant adults aged 19 to 64. They must show 80 hours a month of work, community service, a work program, or half-time education, or earn at least 80 times the federal minimum wage ($580 a month in 2026). Exemptions include pregnant and postpartum members, medically frail members, parents and caretakers of a child 13 or younger, American Indians and Alaska Natives, and former foster youth, among others.

If the state cannot verify compliance, it must send a noncompliance notice. The member then has 30 days to prove they meet the rule or qualify for an exemption. Miss that window, and they can be disenrolled.

For planning, two things matter:

• Every member renewal becomes a twice-a-year event. That doubles the chances that an outdated phone number or unreturned form can end coverage.
• Exemptions only protect members the state knows about. A member who is medically frail or caring for a young child is still at risk if that status never makes it into the state's record before the deadline.

Why MCOs Will Feel This Differently

A provider loses a payment when coverage lapses. An MCO loses the member. That difference shapes three parts of the business at once.

Premium revenue. Capitation is paid per member per month. Every eligible member who drops off for a paperwork reason means the plan loses a month, or several, of premium it doesn't collect, while the fixed cost of running member services, networks, and care management stays the same.

Quality and risk performance. Most quality measures count only members who stay enrolled long enough to qualify. Churn shrinks those denominators, interrupts care plans, and resets risk documentation. A member who returns after a gap often comes back with open care gaps and a higher acuity profile than when they left, which can show up in quality scores, withholds, and incentive payments tied to the state contract.

The state relationship. CMS has told states to treat managed care plans as essential partners in keeping eligible people enrolled, including updating mailing addresses and supporting members through renewal. During the unwinding, states could direct MCOs to collect updated contact information and share it with the state, and plans reported that live calls and text messages worked best. States will look at how well their plans did this again.

There is also a clear permission line. CMS guidance says that renewal outreach to a plan's own enrollees, purely to educate them on completing the state's process on time, does not count as marketing. What a plan may do beyond that, such as helping fill out forms, depends on its state contract and any waivers in place.

Health plans will keep serving members who are at risk of losing coverage. But the plans that reach those members first will keep more of them.

Where Members and Plan Teams Will Feel the Pressure

The added work shows up at four points in a member's renewal cycle. Each one needs a different response.

Before the renewal notice, the plan's contact data is the weak link. If the phone number or address on file is out of date, the state's notice may never reach the member, and neither will the plan's reminder. This is the cheapest point to fix the problem.

When the notice arrives, member services lines fill with questions. A member calls about a letter they do not understand, asks whether the work rule applies to them, or wants to know which documents to send. Calls run longer, hold times rise, and some members give up.

During the 30-day window, a member flagged as noncompliant may actually qualify for an exemption. If no one asks about caregiving, school, or a health condition, that exemption never gets recorded, and the plan disenrolls an eligible member.

After disenrollment, care managers lose contact, scheduled visits go unbilled or get canceled, and the plan has to win the member back when they reapply. This is where a paperwork problem becomes a care and cost problem.

These are four different problems, and MCOs need a clear plan for each one.

Five Ways MCOs Can Prepare Now

Plans cannot solve this by adding another mailer to the renewal cycle. They need to find at-risk members early, reach them in a way that works, and save staff time for members who need a person.

1. Build a Renewal Risk List From Data You Already Have

Combine state renewal dates with your own data: expansion-group status, returned mail, failed calls, and missing phone numbers. Flag members likely to be subject to the work rule, and members who may qualify for an exemption based on claims or care management records. Work the list by renewal date, not by who is easiest to reach.

2. Fix Contact Data Before the State Sends Notices

You can't answer a notice sent to the wrong address. Verify phone, address, and email on every inbound and outbound contact, and share updates with the state wherever your contract allows. This is the single step that most directly prevents procedural disenrollment.

3. Reach Members Before Coverage Is at Risk

Use outbound calls and text to tell members when their renewal is due, what the work rule means for them, and what to send. Keep the message in plain language and in the languages your members speak. Ask short questions to identify likely exemptions, such as caregiving, school, or a health condition, and route those members to staff who can help document them.

4. Set Clear Handoffs and Protect Staff Capacity

Decide which questions automation answers, which go to member services, and which go to care management or an enrollment partner. Pass along what the member already said so they do not repeat their story. Estimate the added call volume from twice-yearly renewals now, and decide what comes off staff plates to make room.

5. Track the Warning Signs

Start a baseline now: share of members with verified contact data, outreach reach rate, renewal completion before the due date, procedural disenrollment rate, and re-enrollment within 90 days. These numbers tell you whether outreach is working and give you evidence to share with the state.

Protect Coverage, but Plan Beyond It

Keeping eligible members enrolled comes first. But a renewal call is also one of the few times a plan reliably has a member on the phone, and it can do more than confirm an address.

The same conversation can screen for social needs such as food, housing, and transportation, connect members to support programs, and book an overdue preventive or chronic care visit. These steps close care gaps, support quality measures, and keep members engaged with the plan between renewals.

Retention and quality are not separate projects. A member who stays enrolled and gets their annual visit benefits the member, the plan, and the state contract.

Use Voice AI to Reach Every Member Before Their Renewal Date

A simple test for any outreach tool: does it reach more members before the deadline, and does it free up staff time for members who need a person? For most plans, the bottleneck is not the message. It is the number of calls a team can make in the weeks before each renewal wave.

SocialRoots AI Agentic caller uses HIPAA-compliant, TCPA-aware AI voice agents to call members under your plan's name, hold a real two-way conversation, and update records as they go. Each call follows four workflows:

Calls run in multiple languages and show a recognizable caller ID, so members are more likely to pick up. Contact updates sync back to your systems. When a member needs a person, the call transfers to your team or books an appointment. Built-in analytics show who you reached, who updated their information, and who still has pending documents.

The goal is not to replace member services. It is to take the repetitive calls off their list, so they have time for the members who are confused, worried, or about to lose coverage.

Start Before the Notices Arrive

The unwinding showed that most coverage losses were not about eligibility. They were about reach: a wrong address, an unanswered call, a form no one explained. The 2027 rules add more renewals and more paperwork to that same weak point.

MCOs that fix their contact data, build a renewal risk list, and start outreach before the first six-month cycle will keep more eligible members, protect premium and quality performance, and give their states proof that they are doing their part. That work needs to start now.

Book a demo to see how SocialRoots helps your plan reach every member before their renewal date.

Frequently Asked Questions

Sources

• 10 Things to Know About Medicaid Managed Care, KFF
• Medicaid Enrollment and Unwinding Tracker, KFF
• Medicaid Community Engagement Requirement Interim Final Rule fact sheet, CMS, June 1, 2026
• Medicaid managed care outreach FAQ, Medicaid.gov
• Role of Medicaid Managed Care Plans in Unwinding, KFF
• CMS tools on managed care plans and retention, Georgetown CCF