In a recent letter to Governors, Acting Health and Human Services Secretary Norris Cochran signaled that the COVID-19 public health emergency (PHE) “will likely remain in place for the entirety of 2021.” Moreover, the letter assures states that when a determination is made to terminate the PHE or let it expire, HHS will provide states with 60 days’ notice. By law, a PHE is limited to a 90-day period but it can be terminated early or extended. The Biden Administration’s announcement is a big deal because our nation’s public health response to the pandemic, as well as efforts to support families and shore up the economy, are inextricably linked to the PHE.
Enhanced federal funding for Medicaid would continue through March 2022.
For state budgets, the announcement provides greater certainty of the 6.2 percentage point increase in the Medicaid Federal Medical Assistance Percentage (FMAP) until the end of the quarter in which the PHE expires or is terminated. If extended through the entirety of 2021, the earliest the PHE would expire would be January 16, 2022, meaning states can count on the FMAP bump through March 2022 (three-quarters of most states’ fiscal years).
Continuous enrollment in Medicaid would continue through January 2022.
To claim the enhanced match, states must continue to meet the conditions of the maintenance of effort (MOE) provisions in the Families First Coronavirus Response Act. Importantly, the MOE protects Medicaid enrollees with continuous coverage until the end of the PHE and prohibits states from rolling back eligibility or imposing new administrative barriers to enrollment. Initially, HHS issued guidance in the form of FAQs that also disallowed states from reducing benefits or increasing cost-sharing. But those protections were shattered when HHS rammed through an interim final rule in early November, reversing aspects of its prior guidance without going through the regular rulemaking process that incorporates public comment before finalizing a new regulation.
States will have more time to prepare to return to normal operations.
The Biden Administration’s promise to provide 60 days’ notice before the end of the PHE is critical for states to initiate the steps needed to resume normal operations. For example, states will need to make changes to their eligibility systems, an effort that requires lead time for computer programming and testing. CMS recently released guidance on unwinding the MOE continuous enrollment provisions and has subsequently posted two tools to assist state planning efforts. The first tool focuses on eligibility and enrollment pending actions and the second provides assistance in general planning to restore regular Medicaid and CHIP operations. (Stay tuned for future blogs on the unwinding guidance and tools).
New CMS leadership will have time to adopt additional strategies to ensure that eligible individuals do not lose coverage at the end of the PHE.
My biggest concern about the end of the PHE is that we will see immediate mass disenrollments that will overwhelm a state’s capacity to assist eligible individuals in retaining coverage. Certainly, we don’t want to repeat the experience of states such as Missouri and Tennessee that disenrolled large numbers of eligible children when they resumed the processing of renewals after months of delay.
When the first COVID public health emergency (PHE) was declared one year ago, few of us could have predicted the pandemic’s devastating impact on public health and our economy. But as COVID ravaged the country, attempts to downplay the crisis rather than follow the science and make the hard choices to get the virus under control deepened a cultural and political divide that has threatened our democracy. Despite overt evidence that we were nowhere near the end of the crisis, the prior Administration extended the PHE mere days before it was due to expire in April and July 2020, creating significant anxiety for states and Medicaid stakeholders. Only after being pressured for more advance notice did HHS extend the PHE a couple of weeks in advance of the October 2020 and January 2021 expiration dates.
The Biden Administration’s letter to Governors is a refreshing and welcomed change in approach to the pandemic and PHE. It provides increased state budget stability and greater predictability as we work to conquer the virus, revive our economy, and restore faith and confidence in government.
