With the House Energy and Commerce Committee reporting out its budget reconciliation bill with at least $625 billion in cuts to Medicaid, I find it ironic that a section of the bill entitled “Improving Enrollment Processes” puts a halt to implementation of a Biden-era rule intended to streamline enrollment and improve retention, especially for children, seniors, and people with disabilities. But that’s not all. Certain expansion enrollees will be subject to harsh work requirements. In addition, expansion adults, including many parents and people with disabilities, will be subject to more frequent renewals and increased cost-sharing. States will also have to implement new requirements for checking for Medicaid enrollment in more than one state.
Let’s start with the 10-year moratorium on implementation of the Eligibility and Enrollment (E&E) rule. The House bill stops short of outright rescission but prohibits the HHS Secretary from implementing, administering, or enforcing the final rule before January 2035. What does this mean?
- Children in CHIP may continue to be subject to punitive policies including waiting periods prior to enrollment, enrollment lockouts when a family misses a premium payment, and gaps in coverage moving from Medicaid to CHIP. They may also bump up against annual and lifetime dollar limits on CHIP services, a practice not allowed in Medicaid or in Marketplace qualified health plans.
- Enrollees will continue to be at risk of disenrollment if the state provides only 10 days to provide verification documents when a change in circumstances occurs. This is woefully inadequate, given mail delays and snafus, and results in unnecessary churn compared to the more reasonable 30-day response window enacted by the E&E rule.
- Seniors and people with disabilities could continue to have to renew eligibility more frequently than children and parents. The rule would have provided annual renewals and a 90-day reconsideration period to submit missing information after a procedural disenrollment without having to complete a new application.
- Individuals will need to provide a second form of ID to prove identity even if their citizenship or qualified immigration status can be verified through the State Vital Records or the Dept. of Homeland Security (DHS). This is administratively inefficient and unnecessary since these are the two most reliable sources of citizenship and lawful status.
- States may continue to struggle with improper payments because the draft legislation puts on hold the first update in 4 decades to rules regarding the maintenance of claims and eligibility records. The improper payment rate is not a proxy for fraud as Medicaid critics assert. More than 4 out of 5 of Medicaid payments deemed as “improper” are due to inadequate documentation. The E&E rule would have helped states reduce the share of legitimate payments that are counted as improper.
Although the bill requires states to update mailing addresses, it stops short of clear instructions on dealing with returned mail, and boosting communications with enrollees when mail is returned, that were required in the E&E rule.
States will no longer be required, but have the option, to provide a 90-day reasonable opportunity period (ROP) for individuals whose citizenship or qualified immigration status cannot be immediately verified by the Social Security Administration and DHS when they apply for Medicaid. During the ROP currently, while an individual gathers and submits documents needed to resolve these verification problems, they can receive Medicaid coverage for up to 90 days. Under the bill, if a state opts to continue to provide an ROP, it will not receive any federal matching funds for that Medicaid coverage if eligibility is not confirmed within the ROP. To avoid potential liability for all ROP costs, states would likely no longer provide Medicaid until the verification process is completed. As a result, some people would go without needed care.
Work requirements aren’t the only red tape that expansion adults will encounter if this bill is enacted. Expansion adults, including many parents, will have to renew their coverage every six months, instead of the current annual renewal. Those with income between 100% and 138% FPL will also be subject to mandatory cost-sharing when they access care with an individual charge of as much as $35 for most services, much higher than the current copays that enrollees pay. (The current 5% cap on cost-sharing remains in place.)
And, if that’s not enough, access to retroactive coverage of outstanding medical bills would be decreased from 3 months to 1 month for all enrollees. That would be particularly harmful for people who suddenly need long-term care or hospital services but they or their families will need time to gather information to apply for Medicaid. Reducing retroactive coverage will mean more out-of-pocket costs and medical debt.
While expansion adults, including many parents, are more likely to lose Medicaid if the House budget is enacted, 2.3 fewer eligible individuals will be enrolled because they would not benefit from the E&E rule as expected – mostly children, seniors, and people with disabilities. They are a certainly a chunk of the 10.3 million people expected to lose Medicaid if the current markup becomes law.