CMS has released long awaited guidance to states on implementing 12-month continuous eligibility (CE) for all children in Medicaid and the Children’s Insurance Program (CHIP) under the age of 19 as enacted by Congress in the Consolidated Appropriations Act. As of January 2023, 26 states cover some or all children in Medicaid for a full year, while 24 of the 34 states with separate CHIP programs do. Starting January 2024, all children in Medicaid and CHIP will qualify for a full year of coverage.
Why is continuous coverage important for children? Continuous coverage is essential for child health and wellbeing. Research has shown that children who are disenrolled for all or part of a year are likely to have fair or poor health status compared to children who are continuously covered. But the benefits of CE also include providing financial security to families, reducing state and health plan administrative costs associated with churn, and enabling states to do a better job of measuring the quality-of-care children receive in Medicaid and CHIP since continuous enrollment is a prerequisite for most health quality measures.
Are there exceptions to the 12-month CE rule? The requirement applies to all children under age 19 enrolled in a mandatory or optional Medicaid eligibility group, a Medicaid or CHIP Section 1115 demonstration, and a state’s separate CHIP program (even if the CHIP enrollee obtains other coverage after enrolling in CHIP). States will no longer be able to apply CE to subsets of children or provide less than 12 months of coverage (e.g., only young children or only children enrolled in separate CHIP). Exceptions to CE requirements include a child turning 19, moving out of state, or passing away. Additionally, 12-month CE does not apply if voluntary termination is requested, the eligibility determination was made in error, or the child is covered under the medically needy Medicaid category. There are currently two additional exceptions in CHIP CE regulations: the child becomes eligible for Medicaid (and must be transitioned to Medicaid) or, at state option, the family fails to pay CHIP premiums or enrollment fees.The CMS guidance indicated in a footnote that the agency is still assessing how non-payment of premiums intersects with CE under the CAA, and plans to issue separate guidance on this topic. The requirement does not apply to children enrolled via presumptive eligibility until a final application determines the child eligible, but it does protect children in states that accept self-attestation and conduct post-enrollment verifications, even if the state obtains information that the child does not meet all eligibility requirements.
What about children already enrolled as of January 2024? While a child who is newly enrolled in Medicaid or CHIP on or after January 1, 2024 will qualify for 12 months of coverage, the provision differs for children who were already enrolled depending on the date of the child’s last renewal or application. If a child was newly enrolled or successfully renewed in the prior 12 months, the date of their most recently completed application or renewal is considered the beginning of their 12-month CE period. However, some children will not have had coverage renewed in 2023, including the time before and after the continuous enrollment requirement was lifted on March 31, 2023. Those children will not benefit from 12-month CE until their ongoing eligibility is redetermined at renewal.
Bottom line, some children will not benefit from 12-month CE until after their next renewal. So how does this work in terms of the effective date of CE for different children?
- New enrollees – Any child, under the age of 19, who is newly enrolled on or after January 1, 2024 will have a guaranteed year of coverage from the effective date of coverage unless they meet an exception noted previously.
- Children whose eligibility was redetermined in the prior 12 months –
- State remains current on renewals in 2024 – Any child whose coverage was renewed in 2023 either before or after the unwinding is protected until their next renewal date, if the state is current on processing renewals. For example – a state successfully renewed a child’s coverage in March 2023 via ex parte; the child’s effective date of 12-month CE is March 2023. If the state processes the renewal in March 2024 and the child remains eligible, the child retains CE for another year starting in March 2024.
- State is delayed in processing renewals in 2024 – In the example above, if the state is delayed in processing the March 2024 renewal for any reason, the child will lose CE in March since the CE requirement is limited to 12 months. If a change in circumstances is acted on before the child’s renewal is processed, the child will NOT be protected by CE. However, during the unwinding, states have flexibility to align action on changes in circumstances with the renewal date to avoid disruptions in coverage for children.
- Children whose coverage was not successfully renewed in 2023 – these children will not be protected by CE until their eligibility has been successfully renewed after January 1, 2024.
What if a state receives information that may impact a child’s eligibility in the middle of their 12-month CE period? If a state receives information on a change in circumstance through a periodic data match or reported directly by the family that would otherwise impact the child’s eligibility, the state may NOT terminate coverage unless the change meets one of the exceptions noted above. States will need to take care to protect children’s coverage if other members of the household are no longer eligible and are disenrolled.
What about continuous coverage for adults and covering kids continuously for more than 12 months? CMS reminded states that Section 1115 demonstration authority is a mechanism for extending the CE period beyond 12 months and/or applying CE to adults. As my colleague Elisabeth Burak wrote, eight states (CA, CO, IL, MN, NM, OH, OR, and WA) have adopted or are in the process of developing multi-year CE for young children. New York provides 12-month continuous enrollment for adults, and IL and OR are planning to provide two-year CE for kids and adults.
What must states do to comply with the new requirement? All states that must newly adopt 12-month CE for all children in Medicaid and/or CHIP must do so effective January 1, 2024. Unlike some past statutory changes to Medicaid to CHIP, there is no provision in the law to allow states to postpone implementation until state legislation is enacted. States will need to submit a state plan amendment (SPA). To meet the January 1, 2024 CE effective date, the state must submit their Medicaid SPA no later than March 31, 2024. For CHIP, the deadline for SPA submission is the end of the fiscal year in which the January 1 effective date falls.
What about coverage from conception to the end of pregnancy (FCEP)? Under CHIP, states may opt to cover prenatal care and other pregnancy-related benefits from conception to end of pregnancy (FCEP, previously called the unborn child option). In the guidance, CMS provided details on how the implementation of the 12-month CE impacts FCEP. Stay tuned for part two of this blog for details!