A 1-2 Policy Punch Would Earn States a Gold Star in Covering Kids

As CCF’s Medicaid child enrollment tracker hit a sobering milestone this week – a net decline of 3 million children since March 2023 – CMS released a package of documents advising and encouraging states to do more to make sure children don’t slip through the cracks during the unwinding of the pandemic-related continuous enrollment requirement. Considering that researchers estimated that most children would remain eligible for Medicaid or CHIP, one might expect that a smaller number of children would lose coverage. But that’s not the case!

However, when you look beyond the national numbers reported by CMS, you’ll see that half of the children who lost coverage live in five states: Texas, Florida, Georgia, Ohio, and Arkansas. In fact, Texas accounts for whopping 24% of child disenrollments based on data through September 2023 according to the Secretary’s letter. HHS sent letters to Governors in those states, as well as smaller states with high percentages of child coverage declines – Idaho, Montana, New Hampshire, and South Dakota – noting that the agency takes its oversight role extremely seriously and will not hesitate to take action to ensure state compliance with federal Medicaid requirements.

In addition to putting the nine states on notice, CMS released an informational bulletin reinforcing federal renewal and reporting requirements, and highlighting actionable strategies that all states can adopt to promote continuous coverage for children and youth who are likely to remain eligible for Medicaid or CHIP. The guidance recommends that states:

  • Conduct targeted outreach to children and youth with special health care needs;
  • Support seamless transitions across programs;
  • Increase ex parte renewal rates;
  • Partner with managed care plans to increase outreach and renewal assistance;
  • Eliminate or suspend premiums or enrollment fees and remove lock-out periods following nonpayment;
  • Delay or pause procedural disenrollments;
  • Boost outreach to families and strengthen partnerships with family-serving agencies and community-based organizations.

But what really caught our eye was CMS encouraging states to take advantage of multi-year continuous eligibility for children through section 1115 demonstration authority, as Oregon, Washington and New Mexico have done and eight other states are quickly pursuing. In fact, we would suggest a 1-2 punch to help states deal with the ongoing operational challenges of the unwinding and protect kids’ coverage at the same time.

Punch 1 would take advantage of an available Section (e)(14) waiver to push children’s renewal dates out a year as CMS offered states when the ex parte household error was revealed in August. Kentucky and North Carolina were the first states to take up this option. Given that children represented 46 percent of all Medicaid enrollees in March 2023, delaying children’s renewals would give overwhelmed systems and eligibility workers breathing room to focus on renewing coverage for adults and vulnerable seniors and people with disabilities.

Punch 2 would implement multi-year continuous eligibility for children, especially young children during those critically important early years, protecting them from the inappropriate terminations of coverage that are particularly acute at renewal even when they remain eligible. When multi-year continuous goes into effect, those children are protected until they reach the upper age range. For example, Oregon, Washington, and New Mexico are covering children continuously until their sixth birthday while Oregon is also covering older children for two years rather than 12-month continuous eligibility that applies to all children in Medicaid starting in 2024.

North Carolina is in line to be the first state to take advantage of the 1-2 punch. As noted above, the state has already received approval to push out renewal dates for children 12 months. And in its Section 1115 waiver application pending at CMS, the state proposes to implement multi-year continuous eligibility for young children up to age six later in 2024.

As we close out 2023, Governors and state leaders should think about the negative repercussions of children losing access to the health insurance they need to thrive. The long-term benefits of Medicaid coverage during childhood have been well documented, including better health, higher education attainment, greater earnings, and lower incidence of disability later in life. Covering young children from birth until they enter school is particularly important in addressing development delays that can hinder school performance and lead to increased special education costs. Every child should have the opportunity to thrive, and Governors can earn a gold star (not to mention winning favor with the voting public) for stepping up to protect children’s health care. The country has made enormous progress in reducing the number of uninsured children over the past two decades; today Governors find themselves at a pivotal moment when state choices will either result in more uninsured children or, states move to a new normal where children are able to access care without their parents tripping over red tape.

Editor’s note: There is a delay in CMS reporting of state level data which accounts for the differences in CCF’s enrollment tracker showing a decline of 3 million children compared to the 2.2 million decline reported by CMS through September 2023. CCF’s tracker includes more current state-reported enrollment data.

Tricia Brooks is a Research Professor at the Center for Children and Families (CCF), part of the McCourt School of Public Policy at Georgetown University.