CMS extends state waivers to keep people covered under Medicaid and CHIP

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The Centers for Medicare and Medicaid Services has announced an extension of unwinding flexibilities for states to protect coverage for people and families enrolled in Medicaid and the Children's Health Insurance Program.

To support states' efforts to establish and update income and eligibility determination systems that maximize their ability to ensure that eligible individuals retain coverage, CMS is further extending unwinding-related waivers through June 30, 2025. 

During the COVID-19 pandemic, states were required to keep people enrolled in Medicaid and CHIP in exchange for enhanced federal funding. 

States adopted many flexibilities to respond to the pandemic and to comply with conditions for receipt of a temporary 6.2 percentage point Federal Medical Assistance Percentage (FMAP) increase that was set in the Families First Coronavirus Response Act.

WHY THIS MATTERS

As of April, 20.1 million people have been disenrolled from Medicaid since the unwinding of the continuous coverage provision began in April 2023, according to KFF.

This represents 21% of people who had coverage during the COVID-19 public health emergency.

CMS-approved adoption strategies to prevent inappropriate disenrollments will continue while the states implement policy, systems and operational fixes to address areas of noncompliance with federal renewal requirements that were identified during unwinding. 

Further, extending flexibilities to streamline renewals will enable states to shift limited resources to reduce processing time at application when needed, CMS said.

Continuous enrollment ended on March 31, 2023, ahead of the end of the public health emergency on May 11, 2023. States immediately began redeterminations for eligibility for Medicaid and CHIP coverage.

As states began to work through the large volume of renewals during unwinding, many states reported that each month they were disenrolling a large percentage of individuals because they did not return a renewal form or other information needed by the state to process their renewal, even though many of these beneficiaries likely otherwise continue to meet all eligibility requirements. 

CMS determined that the unprecedented volume of renewals following resumption of routine operations warranted states' use of the timeliness exception to delay procedural disenrollments while they conducted targeted outreach to encourage beneficiaries to return the renewal form.

At least 15 states used the timeliness exception to delay procedural disenrollments for one or more months during unwinding while they conducted targeted renewal outreach to impacted beneficiaries.

Issues also arose during unwinding over the different approaches taken by states in the redetermination process, which affected how many people in individual states lost coverage.

In May, the American Hospital Association, citing a Kaufman Hall report, said Medicaid disenrollment was a looming concern for hospitals already operating close to the margin. Without coverage, patients were less likely to seek care until severe sickness sent them to the emergency room. Hospitals' charity care and bad debt claims were expected to increase.

The proportion of self-pay patients began increasing for emergency department, hospital and primary care visits following the start of the redetermination process, according to a study from Epic Research.

A recent Robert Wood Johnson Foundation study showed significant variation among states in the Medicaid disenrollment process. Eight states had Medicaid disenrollments surpassing 100% of projected net disenrollments.

THE LARGER TREND

Originally, nearly all states were expected to complete "unwinding-related" renewals by this June. 

CMS' announcement on Thursday of the extension of temporary unwinding-related flexibilities until June 2025 is the third waiver extension. On Dec. 18, 2023, CMS announced the waivers would be extended to Dec. 31, 2024.

Email the writer: SMorse@himss.org