[Editor’s Note: The U.S. House of Representatives approved a revised Build Back Better Act budget reconciliation bill on November 19, 2021. This brief  by Georgetown University CCF and CHIR explain the Medicaid, CHIP, and private health insurance provisions.] 

Yesterday, the House Rules Committee unveiled a compromise reconciliation bill which includes numerous provisions that dramatically strengthen health coverage and access for low-income children and families.  While we will release a more detailed summary along with our colleagues from the Georgetown Center on Health Insurance Reforms (CHIR) when the bill is enacted, we wanted to highlight a few of the key health provisions benefiting children and families:

• Addresses the Coverage Gap in Non-Expansion States. The bill would open up marketplace subsidies to the more than 2 million low-income uninsured adults stuck in the coverage gap in the 12 hold-out states that have not expanded Medicaid.  Marketplace subsidies would be provided for four years (January 1, 2022 through December 31, 2025), with additional cost-sharing protections available starting January 1, 2023 and additional benefits such as non-emergency transportation available starting January 1, 2024.  To encourage current expansion states to maintain their expansion and to further incentivize non-expansion states to finally adopt the expansion, the bill would raise the 90 percent federal matching rate for the expansion to 93 percent for three years (2023-2025).  That would be on top of the American Rescue Plan’s permanent provision that increases the matching rate for a state’s entire Medicaid program for two years if it newly takes up the expansion.
• Expands 12 Months Medicaid and CHIP Postpartum Coverage in All States. The American Rescue Plan established a state option to extend postpartum coverage for one year after the end of pregnancy (beyond the current 60-day limit).  The bill would go further to address the maternal health crisis by requiring all states to permanently extend postpartum Medicaid and CHIP coverage for one year after the end of pregnancy.  The bill would also make further investments in maternal health including a new Medicaid state plan option for maternal health homes which would provide team-based care to pregnant and postpartum people.  It also includes the provisions of the Black Maternal Health Momnibus package, which would support training and diversification of the perinatal workforce, maternal health quality improvements, better data systems to track and identify causes of maternal mortality, investments in historically Black colleges and universities to conduct research into maternal health disparities and grants to support implicit bias training for frontline health care professionals.
• Requires 12-Month Continuous Eligibility for Children in Medicaid and CHIP. While there is a longstanding option for states to provide up to 12 months of continuous eligibility for children in their Medicaid and CHIP programs, only about half the states do so in either their Medicaid or their CHIP programs.  The bill would require all states to implement continuous eligibility for children in both Medicaid and CHIP.  This would significantly reduce the risk that children face periods of uninsurance over the course of a year, which increases their access to care.
• Makes Federal CHIP Funding Permanent. Under current law, federal funding for the CHIP program is only available through the end of fiscal year 2027.  The bill would make federal CHIP funding permanent and ensure that states always have sufficient federal funding to support and expand their CHIP programs.  It would include a technical fix to make it easier for states to expand eligibility for their CHIP programs.   It would also make permanent the Express Lane Eligibility option for states to use income and other eligibility information from other public benefit programs to facilitate enrollment and renewals in Medicaid and CHIP.  Finally, the bill would permanently extend the existing Medicaid and CHIP stability provision for children, which prohibits states from cutting eligibility or making it harder for eligible children to enroll.
• Extends the Rescue Plan’s Provisions Making Marketplace Coverage More Affordable. The American Rescue Plan, enacted earlier this year, substantially increased the premium subsidies available to those with lower incomes (and also expanded eligibility for premium subsidies to those with higher incomes).  The American Rescue Plan also made those who received unemployment benefits automatically eligible for the most generous level of marketplace premium and cost-sharing subsidies.  The bill would extend these marketplace improvements through the end of 2025.
• Expands and Improves Medicaid Home- and Community-Based Services (HCBS) for Seniors and People with Disabilities. The bill would provide states a six percentage point increase in their federal Medicaid matching rates, on a permanent basis, if they maintain existing HCBS eligibility, benefits and provider reimbursement rates and if they implement an approved plan to expand access, strengthen the HCBS workforce and increase payment rates.  States would also receive federal funding for planning grants to develop their HCBS improvement plans, an additional but temporary increase in their matching rate for expansions of self-directed care, a higher matching rate to report new HCBS quality measures, and a higher administrative matching rate related to HCBS improvements for the next 10 years.  The bill would thus significantly improve HCBS services over time, including for children with special health care needs.
• Averts the Fiscal Cliff and Provides Sufficient Federal Medicaid Funding for Puerto Rico and the Other Territories. Puerto Rico and the other territories — American Samoa, Guam, the Northern Mariana Islands and the U.S. Virgin Islands — face a fiscal cliff this December without additional federal Medicaid funding.  The bill permanently addresses the fiscal cliff by providing a significant federal funding increase, adjusted annually, and setting the federal Medicaid matching rate at 83 percent for all the territories.  (Unlike the other territories, Puerto Rico’s matching rate will initially be 76 percent in 2022 but it will rise to 83 percent in 2023.)  This will ensure that Puerto Rico and the other territories have sufficient federal financial support to sustain their existing Medicaid programs and make further improvements to expand coverage and access, although the territories will not be able to come into fuller compliance with federal eligibility and benefit requirements without state-like financial treatment.
• Modifies Medicaid Continuous Coverage Requirement. Under current law, states are receiving a 6.2 percentage point increase in their federal Medicaid matching rates during the duration of the COVID-19 public health emergency.  As a condition of the increase, states cannot cut eligibility or make it harder for eligible families to enroll.  They must also provide continuous coverage: they cannot disenroll any Medicaid beneficiary who was already enrolled or has newly enrolled during the public health emergency.  The bill would begin phasing out the matching rate increase starting April 1, 2022, with the increase fully eliminated after September 30, 2022.  In addition, the continuous coverage protection would effectively end April 1, 2022 but states would have to satisfy a number of procedural requirements before they can terminate Medicaid beneficiaries who have been enrolled for at least 12 consecutive months (during the period between April 1 and September 30, 2022).  Such requirements include redeterminations based on current circumstances, assessments of eligibility under other Medicaid categories, limits on the number of redeterminations that can be made each month, a minimum number of contact attempts, and sufficient notice.
• Establishes New Medicaid Stability Protections. While the bill would end the continuous coverage requirement, health coverage is likely to remain volatile for a considerable period of time.  The pandemic demonstrated the importance of Medicaid as a critical source of coverage.  The bill therefore would continue to encourage states to maintain their current Medicaid eligibility standards, methodologies and procedures through December 31, 2025.  States that cut Medicaid eligibility or make it harder for eligible individuals to enroll would be subject to a 3.1 percentage point reduction in their federal Medicaid matching rate.