When a Medicaid managed care organization thinks about the H.R.1 community-engagement requirements, the conversation usually starts with compliance — what notices to send, by when, through which channels. That is the right conversation to have before August 31, 2026. But there is a second conversation that belongs in the CFO's office, and it starts with a simpler question: what does a procedurally-disenrolled member actually cost a plan?
The model
The core equation is straightforward. Take the number of subject members on your plan — expansion adults ages 19–64 who are subject to the community-engagement requirement. Multiply by your average per-member-per-month (PMPM) capitation rate. Multiply by your estimated procedural disenrollment rate — the share of members who lose coverage not because they failed to work, but because they missed a notice, did not understand the requirement, could not navigate the reporting portal, or were never told about an exemption they qualified for. Multiply by the number of months you expect those members to be off coverage before re-enrolling, if they re-enroll at all. That product is the premium revenue your plan loses to process failure, not to genuine ineligibility.
The llms.txt reference model illustrates the stakes concretely: a plan with 100,000 subject members, a $450 PMPM capitation rate, and an 18% procedural disenrollment rate has roughly $100 million in annual premium revenue at risk. An 18% procedural rate is not a conservative worst case — it is close to what Arkansas documented. The variable most within a plan's control is not PMPM and not the size of the subject population. It is the procedural disenrollment rate itself, which is a direct function of how well the plan communicates.
What the OBBBA does to the math
The One Big Beautiful Bill Act (H.R.1), signed July 4, 2025, changes the math in two ways that compound each other. First, it introduces the community-engagement requirement itself — a new administrative hurdle that every subject member must clear every month to remain enrolled. That alone creates a new source of procedural disenrollment that did not exist before 2025. Second, the OBBBA shortens the eligibility redetermination cycle for expansion adults from once a year to every six months, doubling the administrative touchpoints where an eligible member can fall off coverage even before the work-requirement layer is added. A plan that previously had one redetermination window per year to manage now has two. Each window is an independent churn event. The two stressors — work reporting and faster redetermination — operate simultaneously beginning January 1, 2027, which means the procedural disenrollment rate planners should model is not based on either factor alone.
The Arkansas precedent, read honestly
Arkansas implemented a Medicaid work requirement from 2018 to 2019 before it was enjoined. Roughly 18,000 people — about one in four subject enrollees — lost coverage during that period. Independent analyses found no measurable gain in employment among the affected population. The dominant mechanism of coverage loss was procedural: members who did not understand the requirement, could not access the reporting system, or were unaware of exemptions they qualified for. The Arkansas program also ran on a single reporting pathway (a state web portal with no mobile-optimized design and limited phone support), and did not have a systematic multilingual outreach strategy. Those are not arguments that Arkansas was uniquely bad at execution. They are a description of a baseline that most state programs, without deliberate investment, are likely to replicate.
For MCO planning purposes, Arkansas is not a floor. It is a reference point for what happens when eligible members are not actively supported through a new administrative process. Plans in states that invest in multilingual, omnichannel member communications and proactive exemption assistance will see lower procedural disenrollment. Plans that rely on state-issued notices alone will see rates closer to the Arkansas reference — or higher, because the OBBBA's six-month redetermination cycle adds friction the 2018–19 program did not face.
Running the number for your plan
The four variables to plug in are: (1) your subject-member count — the number of expansion adults on your plan who will face the community-engagement requirement; (2) your average PMPM capitation rate for this population; (3) your estimated procedural disenrollment rate, modeled under different outreach scenarios; and (4) your average gap-in-coverage duration for disenrolled members who eventually re-enroll. Changing variable three — the procedural disenrollment rate — by even five percentage points moves the revenue impact materially. On a 100,000-member plan at $450 PMPM, a five-point improvement in the procedural rate (say, from 18% to 13%) is roughly $27 million per year in retained premium. That is the ROI frame that makes a $50,000 to $150,000 retention program look like a different category of investment.
The Coverage-Loss & Retention ROI Calculator at medicaid.atypical.global/calculator.html runs this model with your plan's actual inputs and returns the premium at risk, the estimated ROI, payback period, and net benefit of a retention program across a range of scenarios. If you want a human review alongside the calculator output, our Procedural Disenrollment Risk Audit delivers a quantified exposure estimate and a prioritized retention plan — sized to what your plan's data actually shows. The math is straightforward. The time to run it is before August 31, not after January 1.