1. Benefits
We are specifying regulatory changes at 42 CFR parts 431 , 435 , 438 , 457 , and 600 to establish a community engagement requirement for certain adults applying for or enrolled in Medicaid, and corresponding requirements added by the WFTC legislation. This IFC provides a regulatory framework that specifies the requirements for States to implement the new community engagement requirement in an efficient, feasible, and cost-effective manner.
We believe the new community engagement requirement could have the potential to produce a range of benefits across multiple stakeholders. This section examines the anticipated benefits for three principal parties implicated by the new requirement: Medicaid applicants and beneficiaries subject to the community engagement requirement, States, and the Federal government.
The bulk of the benefits and costs are associated with the change in time allocation of program participants. The White House Council of Economic Advisers (2025) found that, among able-bodied adults aged 19-64 participating in Medicaid in 2024, 49.6 percent did no work for pay at any time during the calendar year. [ 134 ] CMS invites comment on the estimation of the number of adults moved to engagement as a result of the IFC. If those with zero work are more likely to participate in Medicaid for the full calendar year than the other able-bodied adults aged 19-64, then more than 49.6 percent of able-bodied adults aged 19-64 on Medicaid in any given month did no work for pay at all during the calendar year, and even more did no work during that month. Under this IFC, such adults would either (a) not participate in Medicaid, (b) work to earn at least $580 per month (= $7.25 × 80 hours), (c) satisfy community engagement in another way, or (d) a combination of each. In the benefits and costs subsections of this economic analysis, we quantify benefits and costs per additional hour of work. The aggregate time allocation section multiplies dollar amounts per hour by our estimates of aggregate hours of time allocated to work as a result of the IFC.