Approved Disaster Relief SPAs Reduce Burdens on Beneficiaries

CMS has begun approving states’ disaster relief State Plan Amendments in response to the COVID-19 crisis. As my colleague Tricia Brooks recently described, these SPAs allow states to make temporary changes to eligibility, enrollment, and cost-sharing policies among others flexibilities. It is important to note that the changes requested, and subsequently approved, in the disaster SPAs cannot “restrict or limit payment, services, or eligibility, or otherwise burden beneficiaries and providers.” To date, CMS has approved eleven disaster relief Medicaid SPAs for seven states (AL, AZ, and RI have multiple approvals), many of which reduce burdens on beneficiaries.

Around half of the approved disaster SPAs suspend premiums and/or cost-sharing for all or certain eligibility groups (AL, AZ, MN, ND, WY). For example, Arizona has suspended premiums and cost-sharing for all members while Minnesota has suspended cost-sharing for COVID-related testing and treatments. Research has shown imposing premiums and cost-sharing on low-income families increases financial burdens on beneficiaries, creates barriers to coverage, and reduces utilization of necessary services. Cost-sharing increases burdens on providers as well, who have to collect the payments. During a public health emergency, providers’ focus should be on providing care rather than having to collect negligible copayments. Eliminating these barriers is a positive step for states to help ensure beneficiaries get the care they need.

Several states have been approved to adopt 12-month continuous eligibility for children under 19 (AZ, RI). 12-month continuous eligibility allows for children to remain enrolled in coverage until their annual renewal, even if they experience changes in family circumstances. Prior to the COVID-19 national emergency, 23 states had adopted 12-month continuous eligibility in Medicaid.

Arizona and Rhode Island have also chosen to cover testing for the optional uninsured eligibility group  created by the Families First Act. Per the Section 6004 of the law, these states will receive 100 percent federal reimbursement for the cost of testing individuals in this optional uninsured group (treatment for the group is not covered; some states have requested expenditure authority to cover the uninsured group through 1115 waivers).

Provisions approved through states’ disaster SPAs are making it easier for beneficiaries to receive services. Providers in Alabama and Minnesota are now allowed to deliver services via telephonic communications. Some states will ease the exception process to their Preferred Drug List if drug shortages occur (AZ, ND, RI) and in others, quantity limits for certain prescription drugs are being increased to reduce the need for beneficiaries to visit providers and pharmacies (MN, ND). Three states also provided automatic renewal for prescriptions without the need to receive further prior authorization (AZ, ND, RI).

After two plus years of many states trying to create red tape through Section 1115 waivers, there is finally a respite. The provisions approved in the disaster SPAs ease the burdens on beneficiaries at a time when it could not be more needed.

[Note: our tracker of approved disaster relief SPAs can be found here]

Allexa Gardner is a Research Fellow at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.