Cost Sharing Is Coming for Part of Medicaid Expansion — What HCBS & LTSS Leaders Need to Do Now
A practical playbook (mapped to workforce, compliance, client support, and advocacy)
Beginning October 1, 2028 (FY2029), states must add copays for a subset of Medicaid expansion adults. For HCBS and broader LTSS organizations, this is a real operational change: it affects referral behavior, scheduling, collections, and your team’s day-to-day conversations with clients. Here’s the breakdown and a concrete action plan.
What’s changing (in plain language)
Who is affected? “Specified individuals” = adults covered through the ACA Medicaid expansion whose family income is above the federal poverty level.
What will they pay? States must impose copays (> $0) with a per-item/service cap of $35 and a family cap of 5% of monthly or quarterly income (state chooses the accounting period). Premiums are not allowed for this group.
What’s excluded from copays? Services that federal law already shields, plus: primary care, mental health and substance use disorder services, and services at FQHCs, CCBHCs, and RHCs. (Emergency services are also protected.)
Can providers require payment up front? States may allow providers to condition service on payment of the copay; providers can still waive or reduce case-by-case.
Source of truth: These rules are in §1916(k) of the Social Security Act as amended by H.R. 1 (“One Big Beautiful Bill Act”). KFF’s summary confirms the FY2029 start and outlines the exclusions.
Why it matters for HCBS & LTSS
Utilization may dip when clients face new out-of-pocket costs, even small ones.
Front-desk friction increases (estimating, explaining, and collecting small balances).
Equity risks: Clients with variable hours, caregiving duties, or unstable income may defer essential supports—raising safety issues and avoidable acute-care use.
Denials exposure: If your system mis-flags who owes a copay (or exceeds the 5% cap), you risk write-offs and complaints.
KFF notes states must add cost sharing for expansion adults alongside other changes (e.g., semiannual renewals and work documentation), which together can amplify churn and financial strain.
Timeline you can take to payer/State meetings
Now–2027: States plan policy, IT, and notices.
FY2029 (on/after Oct 1, 2028): Copays start for specified expansion adults; service-category exclusions apply; 5% monthly/quarterly family cap in effect.
Priority actions
1) Workforce development
Train “benefits-navigation” skills for schedulers, intake, and supervisors: who owes copays, which services are exempt, how the 5% family cap works, and how to discuss costs while preserving dignity and autonomy. Use short scripts and one-page job aids.
Create a small-balance competency for billing/office staff: estimating copays, capturing payments without delaying care, and triggering hardship reviews when appropriate.
Micro-credentials (2–4 hours): “Cost-sharing conversations,” “Identifying exemptions,” and “Cap tracking basics”—tied to role-based performance goals.
2) Compliance adherence
Eligibility + liability logic: Update your EHR/billing rules to (a) identify expansion adults over FPL, (b) apply $35 per-service caps, and (c) stop charging once the 5% family cap is reached for the state’s chosen period (month or quarter). Document your logic and test cases for auditors.
Exclusion engine: Hard-block copays on primary care, MH/SUD, FQHC/CCBHC/RHC, and other federally protected services. Build visible flags so staff don’t ask in error.
POS policy: If your state lets providers require payment, decide your approach (requirement vs. suggested contribution vs. post-service billing). Publish it, apply it consistently, and retain case-by-case waiver documentation.
3) Client support
Plain-language, multilingual handouts that answer:
Will I have a copay? (Only some expansion adults; many services are exempt.)
How big? (Usually under $35 per service; total cannot exceed 5% of family income for the month/quarter.)
Where are copays not charged? (Primary care; MH/SUD; FQHC/CCBHC/RHC; emergencies.)
What if I can’t pay? (Explain hardship review and your agency’s approach.) (Congress.gov)
Respect-forward scripting for staff: affirm autonomy, avoid shaming, and ensure privacy when discussing balances.
Warm referrals (transportation, food, caregiver stress, dementia support) to reduce missed visits that can cascade into worse outcomes.
4) Advocacy
Ask your state:
Will the state standardize copay rules across MCOs (same caps, same exemptions, same accounting period)?
What real-time data feeds will plans share so providers can see who owes copays and cap totals?
How will notices explain exemptions and caps—in plain language and multiple languages?
Will the state monitor access impacts (missed-visit rates, appeals, grievances) and adjust?
Recommend consumer-protective choices: monthly (not quarterly) cap accounting for easier tracking, uniform hardship standards, and automated cap-metering in plan portals so providers aren’t guessing at the point of care. (KFF’s implementation tracker is a good lens for state-by-state decisions.) (KFF)
Simple explainer you can drop into your website or intake packets
Will everyone on Medicaid have a copay?
No. Only some expansion adults with income above the poverty level. Many services are exempt (primary care, MH/SUD, FQHC/CCBHC/RHC, emergencies).
How much could someone pay?
Up to $35 per service, and never more than 5% of family income in a month or quarter (the state chooses). No premiums for this group.
Can a provider require payment before the visit?
States may allow it. Providers can still waive or reduce copays case-by-case. Ask your provider about their policy.
Metrics to watch (and bring to payer/State check-ins)
Share of eligible visits with copay correctly applied
Cap-breach prevention rate (encounters auto-zeroed after the family hits 5%)
Hardship approvals and turnaround time
Missed-visit rate and client complaints linked to cost sharing
Bad-debt trend on copay-eligible services
Bottom line
Cost sharing for a slice of the expansion population is coming. Providers that
(1) train teams for clear, respectful conversations,
(2) hard-wire exemptions and caps into systems,
(3) support clients with simple, multilingual guidance, and
(4) press states for uniform, data-driven implementation will protect access—and keep operations smooth—when FY2029 arrives.
References
Congress.gov. (2025). H.R. 1—One Big Beautiful Bill Act (119th Congress): Text, §44142 (amending SSA §1916 to add subsection (k)). Retrieved August 21, 2025, from the Library of Congress website. (Congress.gov)
Congress.gov. (2025). H.R. 1—One Big Beautiful Bill Act (119th Congress): Text, §44142 (provider payment as a condition; “specified individual” definition; exclusions). Retrieved August 21, 2025. (Congress.gov)
KFF. (2025, Aug 4). Health Provisions in the 2025 Federal Budget Reconciliation Law (Medicaid cost-sharing summary and timeline). (KFF)
KFF. (2025, Jul 8; updated). Tracking the Medicaid Provisions in the 2025 Budget Bill (state implementation tracker). (KFF)
