Uncertainty over Medicaid Coverage Looms for Millions

An abrupt end to the public health emergency (PHE) on April 16 could shock the health care system – absent any new laws or regulations to extend the PHE’s popular emergency provisions.  Last week’s blog post discussed some of the important Medicare telehealth waivers currently in place due to  the PHE, and how ending the PHE would affect access to these health care services.  This week’s blog post focuses on what ending the PHE would mean for Medicaid and the millions of people who’ve gained coverage since the pandemic started.

Background: Medicaid is a federal and state health insurance program that provides health coverage for eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. Currently, 76 million Americans – nearly a quarter of the US population – is covered by Medicaid or the Children’s Health Insurance Program (CHIP), a program that focuses on children.

Then came the pandemic.  To ensure continuous health care coverage, Congress enacted the Families First Coronavirus Response Act in March 2020, which gave states a 6.2% Federal Medical Assistance Percentage (FMAP) increase if they agreed to maintain eligibility levels in place at the time.

Before the PHE went into effect, states regularly reviewed whether people still qualified for coverage based on income, age, disability status, and other factors.  Since the PHE began, however, state Medicaid agencies have been prohibited from disenrolling anyone during the pandemic.

The end of the PHE could eventually trigger a tsunami of coverage losses, which experts project would affect 15 million Americans – including 6.7 million children Once the PHE ends, state Medicaid officials will be tasked with evaluating the eligibility requirements of all their enrollees, which they did not need to do over the past year and half. Beneficiaries who earn too much money or failed to provide necessary information about income or residency could be dropped from their coverage, leaving them uninsured for a period of time with Medicaid programs facing the resurface of the “churn.”

However, the PHE’s end wouldn’t immediately cause millions to lose coverage.  The administration has said that the additional Medicaid funds provided through the FMAP increase would last until the end of the quarter when the PHE expires, meaning that if the PHE truly ends on April 16, the additional Medicaid funds would last until June 30 – giving state Medicaid officials some breathing room.

The administration has also said it would give state Medicaid agencies a year to redetermine eligibility for current enrollees, but many states could be pressed to reevaluate immediately and ultimately drop coverage for some beneficiaries due to financial pressures. 

What happens next?  The Biden administration has not specifically said whether it will extend the PHE or let it expire on April 16 .  However, as an indication of what the administration may do, the Centers for Medicare and Medicaid Services (CMS) put out a request for information (RFI) on February 17 seeking feedback to develop a more comprehensive strategy on Medicaid and CHIP.  According to the RFI, CMS is looking for specific feedback on access to health care, including maintaining coverage and looking to improve provider participation by ensuring adequate provider payment rates to encourage provider availability and quality.  

Absent specific actions from the federal government, states should consider these steps to blunt the impact of coverage losses:

  • Use available funding sources like COVID-19 relief funds to invest in community-based navigators to educate beneficiaries about their coverage options, like ACA marketplace coverage.
  • Improve the redetermination process by establishing an automated review process that uses different data sources to verify eligibility.
  • Use multiple outreach strategies like telephone, email, and text to contact beneficiaries who are harder to reach and for whom state Medicaid offices has received returned mail.