When the public health emergency (PHE) ends, pandemic-era protections that allowed Medicaid enrollees to remain in the program regardless of changes to their eligibility, will also end. Will states and the federal government be ready for the transition, or will beneficiaries fall through the cracks?
“The stakes couldn’t be higher,” said Kinda Serafi, JD, a partner for healthcare consultancy firm Manatt Health.
Unwinding protections in the Medicaid program represents “one of the biggest coverage events” since the Affordable Care Act’s (ACA) implementation, but in reverse, Serafi told MedPage Today. “Then, we were seeing considerable enrollment, and now we’re really worried about the potential coverage loss of eligible people,” she said.
According to a recent study from researchers at the Urban Institute, if the PHE ends after the second quarter of 2022 more than 14 million people could lose Medicaid coverage; if it ends after the third quarter it could be close to 16 million enrollees.
But “this is not going to be 16 million people who lose healthcare coverage,” clarified Matt Salo, executive director of the National Association of Medicaid Directors, who spoke at a recent Bipartisan Policy Center (BPC) webinar focused on the transition away from the PHE. In other words, enrollees are expected to move to employer-sponsored health plans or to the ACA’s marketplace plans.
So, while concern is in order, “I think it is also appropriate to say, ‘You know what? The system worked,'” said Salo. “It ensured that a very large number of low-income individuals — who were worried about the pandemic, worried about their jobs, worried about their health — have been covered and have remained covered throughout much of these troubling couple of years.”
Background
On Jan. 31, 2020, then-HHS Secretary Alex Azar declared a PHE over a “novel coronavirus.” It has since been renewed eight times (each time for an additional 90 days), with the latest declaration set to expire on April 15. However, it is widely believed that the declaration will be renewed at least one more time, given that HHS pledged to give states 60 days notice before announcing an end to the emergency — no such notice has been given.
During the pandemic, Congress intentionally established flexibilities for the Medicaid program in which virtually no one who enrolled in Medicaid or who was already in the program could lose their coverage for the duration of the emergency, Salo explained during the BPC webinar.
Congress used a continuous coverage provision in the Families First Coronavirus Response Act to temporarily increase the federal government’s share of Medicaid spending, known as the federal medical assistance percentage (FMAP), while also blocking states from disenrolling people involuntarily, with exceptions for those who moved out of state.
As Hemi Tewarson, JD, MPH, president and executive director for the National Academy for State Health Policy, explained during a webinar in early March, continuous coverage requirement ends on the last day of the month in which the PHE ends (the increased FMAP is slated to expire at the end of the quarter in which the PHE ends).
While there is no definitive end date for the PHE , many experts are feeling “increasingly comfortable” with the idea that the emergency declaration could be extended one last time and end in mid-July — meaning continuous coverage requirements would end August 1, Serafi said.
CMS recently updated its guidance for states aimed at promoting continuity of coverage when the PHE does end. In that guidance, CMS extended the deadline for processing eligibility renewals for Medicaid and the Children’s Health Insurance Program (CHIP) from 12 to 14 months following the end of the PHE; urged states not to initiate renewals for more than one-ninth of their caseload in a given month; and recommended they adopt a “risk-based approach” designed to “prevent inappropriate terminations and promote smooth transitions” to other plans, for those no longer eligible for Medicaid or CHIP.
In addition to issuing guidance, CMS has asked states to submit a report summarizing their plans for prioritizing and distributing renewals, “no later than the 45th day before the end of the month in which the PHE ends,” a CMS spokesperson wrote in an email to MedPage Today.
“CMS has provided an updated operational plan and self-assessment tool that the agency is recommending all states use to create an operational plan,” the spokesperson noted, adding that the agency is “collaborating extensively with states” to prepare for a return to normal operations. In addition to online tools and resources, the agency has created work groups, biweekly all-state calls, and provided individualized state technical assistance.
Challenges for States/Beneficiaries
Prior to the pandemic, approximately 71 million Americans were enrolled in Medicaid and CHIP. As of September 2021, according to CMS, roughly 85 million Americans were enrolled in the programs.
Salo said that states’ top priorities are: first, that no one who is still eligible for Medicaid loses their coverage, and second, providing a “warm handoff” to other plans for those who are no longer eligible.
This transition process will require collaboration between state and federal programs and public and private partnerships as well as support from managed care, providers groups, and community based organizations, he noted.
“There’s a couple of key places where we know we’re going to lose eligible individuals,” Serafi said.
Renewal requirements mandate that states start with an “ex parte” process first. This means, instead of asking individuals to complete a form or provide documentation, states look to available data sources to confirm eligibility, such as from the Supplemental Nutrition Assistance Program, or the Women, Infants, and Children program.
“A best practice state is at 60% to 70% ex parte,” said Serafi. States with a lower reliance on this process have a larger pool of enrollees from whom they must request documentation by mail. This is problematic because over the last 2 years, people have moved, their life circumstances have changed, and they haven’t contacted their Medicaid agencies, she noted.
“And once we get returned mail, we won’t be able to find the person to say, ‘Please help us understand what your eligibility is so that we can keep you covered,'” Serafi said.
Jeff Bahr, MD, chief medical group officer for Advocate Aurora Health, who also spoke during the BPC webinar, said he’s very concerned about Medicaid beneficiaries losing coverage. Unless states and stakeholders “seal the cracks” through which Medicaid enrollees might fall, “we’re going to have a secondary pandemic of unaddressed chronic disease. We’re going to have people who are going without routine cancer screenings, or routine cardiovascular screenings, [or] routine immunizations unrelated to COVID.”
For all of these reasons, many state agencies have begun reaching out to confirm mailing addresses and contact information, so that when notices regarding renewals are sent out they reach the intended individuals, Tewarson noted.
But for those states without a strong “return mail set-up … we’re really … anticipating loss,” Serafi said.
“There is going to be some … natural churn that happens when people don’t reply [to renewal notices]. But if it’s a higher number than what’s expected, we’d love to see states implement a circuit breaker,” she added.
In other words, hit the pause button and investigate the problem.
While there is no such “circuit-breaker” language in CMS’s guidance, the agency has asked states to submit monthly data on renewals for at least 14 months.
“If state data suggests that a higher than usual number of people are losing coverage than expected, CMS will work directly with the state to identify the root cause(s) of such losses to develop effective mitigation strategies to address any problems identified while a permanent solution is implemented,” a CMS spokesperson told MedPage Today by email.
But there are other challenges, beyond the procedural hurdles, noted Salo.
Medicaid beneficiaries have gotten used to a plan with “robust” benefits that doesn’t require any premiums, co-pays, or deductibles. Marketplace plans may have, for example, a $5,000 deductible and significant premiums, he said.
Someone who has just exited the Medicaid program may say, “‘Sure, I’m eligible for it, but I can’t afford that,'” Salo said.
So, it’s important to ensure that marketplace subsidies provide enough support so that plans represent, “a legitimate form of coverage,” and an option accessible to people leaving the Medicaid program.
Impact of Federal Match Declines
Financially, the unwinding also creates challenges for state Medicaid agencies themselves. The increase in the federal match was a major reason the program covered so many people during the PHE.
“You don’t want this cliff,” said Salo, where at a certain point federal dollars flowing into Medicaid drop off in a significant way. “That is disruptive.”
Regardless of the speed at which the FMAP is phased out, the increased federal dollars are expected to run out “well before” the obligation to provide continuous coverage ends, Salo said. So as states try to ensure the transition is “as humane and effective as possible,” they also face these added tensions.
“There are going to be some serious fiscal challenges if Congress does not reconcile that problem and force[s] states into a dynamic [where] we’re keeping people on [Medicaid] for an additional 9, 12, 14 months, without any kind of sufficient federal support,” he said.
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