CMS Takes Positive Steps to Protect Enrollees from Loss of Coverage at End of the PHE

A couple of weeks ago, I blogged about opportunities for the Biden Administration to make improvements to the December 2020 guidance issued to states on resuming routine eligibility and enrollment operations at the end of the public health emergency (PHE).  At the top of the list was to give states more time to catch up on delayed actions and to protect eligible enrollees from loss of coverage when states begin to phase out COVID-related continuous eligibility. Thankfully, CMS has listened carefully to states, Medicaid advocates, and other stakeholders concerned about the potential for mass disenrollments in the days and weeks following the end of the PHE. The updated guidance gives states a full year to catch up on delayed actions and it requires states to conduct a fresh review of eligibility before disenrolling people. In the 25 years, I’ve been working in the world of Medicaid, Friday guidance in the summer has often meant something bad. But not this time.

First, a bit of background. During times of economic downturns, unemployment increases – often with a loss of health insurance. As a result, more people turn to Medicaid to access health care, driving up costs when state revenues are down and budgets are stretched. Like similar economic relief efforts in the past, when Congress enacted the first COVID-response legislation, it provided states with enhanced federal funding to help offset the increased costs in Medicaid. These dollars generally come with some strings attached, typically requiring states to maintain eligibility levels and to prohibit states from erecting barriers to enrollment, such as increasing premiums or making it harder for applicants to provide evidence of eligibility. But, the Families First Corona-Virus Response Act went a step further. It required states to maintain continuous enrollment for all individuals enrolled in Medicaid as of March 18, 2020, as well as those who subsequently enroll until the end of the PHE.

The initial guidance released in December 2020 issued a clear directive that states should continue to process renewals and changes to the extent possible so that renewal dates could be pushed out a year for some share of enrollees, thereby reducing the backlog of delayed actions. It allowed states to take up to six months to catch up on overdue renewals and processing changes in circumstances. But it also permitted states to begin to keep a disenrollment list for individuals determined ineligible in the last six months of the PHE. Moreover, this “lookback period” applied to individuals who did not respond to a request for information or whose mail was returned. Given how rapidly things evolve during this pandemic, the concern has been that eligible individuals would lose coverage because their circumstances had changed since the state took action or because their mail was never delivered.

Well, that’s all changed now. Given that states will have a full year to catch up on delayed actions, states will be expected to conduct a fresh review of eligibility before disenrolling anyone at the end of the PHE. While we were hoping for more – such as requiring states to take steps to proactively update mailing addresses – we commend CMS giving states more time and eliminating the lookback period.

Now, this doesn’t mean we’re out of the woods. There will be fiscal pressure on states, and in some states, political pressure, to move quickly to reduce enrollment – particularly considering that the 6.2 percentage point increase in federal matching funds extends only to the end of the quarter in which the PHE ends. So, advocates will still need to be diligent to make sure that the state doesn’t move so quickly that eligibility workers are unable to keep up with the increased workload and consumer assistance resources are overwhelmed and unable to meet the inevitable increase in the need for help. Encouraging the states to establish processes and procedures that make it easier for eligible children and families to retain coverage and monitoring the phasing out of the continuous eligibility protection is still critical in the months ahead.