Kentucky details tight HR 1 rollout: work requirements start Jan. 1, 2027; systems must be ready Sept. 1, 2026

Commissioner Lee of the Kentucky Department for Medicaid Services told the Medicaid Advisory Committee on May 11 that the state must implement new federal community‑engagement and work requirements for Medicaid expansion members beginning Jan. 1, 2027, and have systems ready by Sept. 1, 2026.

"Individuals in the Medicaid expansion program will have to meet community engagement or work requirements beginning 01/01/2027," Commissioner Lee said, noting exemptions for pregnant and postpartum people, certain caretakers and others identified in federal guidance. She said DMS estimates roughly 70,000 expansion members could be subject to the new requirements because many other enrollees already work or qualify for exemptions.

The commissioner said the state also must change recertification timing for expansion members from annual to every six months beginning in January 2027 and will limit retroactive eligibility for expansion applicants to one month going forward. "We have to have our system ready by 09/01/2026," she said, calling IT changes a "major lift."

DMS plans to implement HR 1 through coordinated policy, IT, communications and stakeholder engagement work streams. The department described drafting rules and state plan changes, convening IT work groups, creating notice‑improvement and stakeholder review groups, and testing system updates with beneficiary and provider input.

Committee members pressed officials about practical impacts. A member asked who would cover emergency care for noncitizens no longer covered under certain eligibility groups; Commissioner Lee said emergency time‑limited Medicaid for births and other emergencies will continue to be paid, but routine care for groups removed from coverage could become uncompensated care for hospitals.

Speakers also raised financial concerns. Steve Spector and others warned of state budget shortfalls tied to recent legislative changes. "It looks like we're short about $270,000,000 the first year for ’27," a staff member said during budget discussion and later noted larger shortfalls in following years; Commissioner Lee said DMS is still analyzing the new budget and added that some administrative HR 1 activities received limited additional funding but that further ongoing costs remain to be covered.

DMS emphasized it will seek CMS review and approval for federal waivers, rule changes and state plan amendments. Commissioner Lee said the department will aim to use ex parte renewals and available data sources to limit coverage loss, but acknowledged the combination of more frequent renewals and the need to verify community‑engagement compliance will add administrative burden.

DMS invited MAC participation in focus groups, IT testing and notice review work groups to help improve user experience. "We definitely need our members, individuals who are going to be using this system to test it," Commissioner Lee said. The department said it will circulate draft communications and seek stakeholder feedback before finalizing notices.

What’s next: DMS will continue policy drafting, IT development and stakeholder outreach through 2026 and said it will report implementation milestones to the MAC; the department will monitor provider participation and fiscal impacts as HR 1 implementation proceeds.