Recently, Congress released H.R. 2617 and within the $1.7 trillion bill was a requirement for states to start Medicaid eligibility redeterminations by April 1. States have been expecting eligibility redeterminations, but up until this point, it was not clear when they would occur because of the PHE extensions.
Due to the April deadline, they will need to review their Medicaid budgets as federal funding decreases and maintenance of eligibility requirements (MOE) expire. States expect the eligibility redeterminations to take at least a year to complete. During that time, it will be critical for states to communicate the change and updated eligibility statuses to program recipients.
In the course of the pandemic, Congress passed the FFCRA to expand Medicaid coverage and deliver additional fiscal aid to states by increasing the federal medical assistance percentage (FMAP) by 6.2 percent. Under the legislation, states were restricted from changing eligibility or removing members from the program. In recent months, states have requested a 120-day notice to prepare for the end of the PHE, but H.R. 2617 only allows for 3 months.
Along with eligibility redeterminations, the bill also features a gradual phase-down of the 6.2 percent FMAP over the next year. Rather than an instant reduction, the FMAP will decrease to 5 percent between April and June and slowly drop to 1.5 percent by the end of December.
States will need to generate monthly reports and make various efforts to correspond with plan members before they disenroll them to qualify for the FMAP step-down. For instance, states can not disenroll a member because their mail was returned. Plans will need to follow up with beneficiaries using other methods, such as email. These efforts will help to reduce the number of beneficiaries that lose coverage.
According to Medicaid.gov, this will be the "single largest health coverage transition event since the first open enrollment period of the Affordable Care Act." DHHS released a report in August predicting that approximately 15 million people would lose coverage based on historical patterns of coverage loss.
Now that states have a deadline to redetermine Medicaid eligibility, coordinating benefits to ensure eligible beneficiaries continue receiving coverage will be crucial. Some members will be eligible for additional benefits. Others may enroll in employer-sponsored healthcare or find coverage on the ACA exchange. While eligibility redeterminations will be a challenging task for Medicaid plans, it will also present an opportunity to ensure that vulnerable populations receive benefits and that program resources are preserved.
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On January 31, 2020, the Department of Health and Human Services declared the Coronavirus a public health emergency. Since then, the Public Health Emergency (PHE) has been renewed nine times, but it is set to expire this August unless it is extended again. Its expiration will have a major impact on Medicaid, when one takes into consideration that millions of beneficiaries will lose the coverage that the PHE and corresponding legislation provided.
Soon after the PHE was declared, Congress passed the Families First Coronavirus Response Act (FFCRA). The legislation served to provide relief during the pandemic by expanding Medicaid to prevent coverage losses for vulnerable populations while simultaneously giving fiscal relief to states. The FFCRA was able to accomplish this by raising the federal medical assistance percentage (FMAP) by 6.2 percent. Additionally, the FFCRA altered the maintenance of eligibility (MOE) requirements by prohibiting states from changing eligibility or removing members from the program, and changed enrollment processes until the end of the pandemic.
Due to the changed Medicaid eligibility criteria, enrollment in the Medicaid program surged during the pandemic. A report by KFF estimated that program enrollment grew by twenty-five percent or 22.2 million enrollees between FY 2019 and FY 2022. Out of those enrolled, MOE enrollment growth represented 18.7 million new enrollees.
With the end of the PHE approaching, states will need to review their Medicaid budgets considering that they will no longer receive the FFCRA's increased funding. Additionally, the MOE requirements will expire, and states will need to begin eligibility redeterminations. As a result, KFF estimates that anywhere between 5.3 million and 14.2 million enrollees could lose coverage.
According to Medicaid.gov, this will be the "single largest health coverage transition event since the first open enrollment period of the Affordable Care Act."
Coordinating benefits to ensure eligible beneficiaries continue receiving coverage during the transition will be critical. CMS has published guidance to assist states with eligibility redeterminations, transitions between coverage programs, and resuming normal eligibility and enrollment operations. According to the guidance, states will have 12 to 14 months to perform redeterminations. DHHS will give a 60-day notice on when the PHE will end to help states prepare.
Considering the growth in Medicaid enrollment because of the FFCRA and the upcoming expiration of provisions, it will be interesting to see how many individuals will remain eligible to receive the Medicaid program's vital health care benefits. In some instances, the circumstances for some individuals will have improved, so they will no longer require assistance. Alternatively, some beneficiaries may be eligible for additional benefits. Eligibility redeterminations will certainly be a challenging task for Medicaid plans; however, it will be an opportunity to ensure that the most vulnerable populations are receiving benefits and that program resources are being used responsibly.
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