On August 31, the Centers for Medicare and Medicaid released a proposed rule designed to make it easier for eligible individuals to obtain and maintain Medicaid and Children’s Health Insurance Program (CHIP) coverage. Together, Medicaid and CHIP provide coverage for 89 million low-income people. The Affordable Care Act (ACA) has made significant changes to help simplify, streamline, and coordinate eligibility and enrollment in all health programs, especially for children and adults, but complexities remain and some eligible people do not enroll or opt out of the program. Although there are broad eligibility and enrollment rules, states administer the Medicaid program and there are considerable variations in eligibility, enrollment, and renewal policies. The proposed rule would create more uniform processes across states and be consistent with the Biden administration’s focus on boosting coverage and access. Although Medicaid eligibility is complex and the proposed rule contains many provisions, this business intelligence highlights some of the most notable changes.
1. The proposed rule strengthens timeliness requirements for state eligibility determinations and creates new requirements for states when they receive returned mail.
Existing rules specify that states are required to determine Medicaid eligibility within 90 days for those applying on the basis of disability and 45 days for other applicants, but no time limit is provided when applicants must provide additional information upon renewal and for changed circumstances. . The proposed rule creates uniform requirements to help ensure that applicants have sufficient time to submit required documentation to states upon application, renewal and when changes in circumstances are reported. The proposed rule also clarifies that states should verify available data sources, conduct outreach using different modalities, and attempt to obtain forwarding address information before terminating enrollee coverage due to a return mail.
Data shows that one in 10 Medicaid enrollees can de- and then re-enroll in Medicaid within a year (churn). The data also suggests that states implementing periodic eligibility checks between renewals may have contributed to declining Medicaid enrollment before the pandemic. Eligible persons risk losing their coverage if they do not receive or understand forms requesting information to verify their eligibility or do not respond to state requests within the required timeframes. While many states have policies in place to track returned mail, some states may opt out of individuals if mail is returned.
2. The proposed rule simplifies enrollment and renewal policies for people age 65 or older or with disabilities, many of whom are also enrolled in Medicare.
The ACA has simplified eligibility processes for children and adults under age 65 who are ineligible due to a disability. Eligibility for these populations depends on applicants’ Modified Adjusted Gross Income (MAGI) on their tax returns. The ACA has established renewal requirements, such as using pre-filled renewal forms and completing renewals on an annual basis. (A mandatory renewal process on an annual basis is not the same as 12-month rolling eligibility, where enrollment is guaranteed for one year even if there are income changes that must be reported. ) The proposed rule would apply similar streamlined processes for those eligible due to disability or age 65 or older (referred to as “non-MAGI” populations because eligibility is not determined using MAGI) . A recent survey shows that all but one state (West Virginia) perform annual renewals for non-MAGI populations, but 15 do not use pre-filled renewal forms.
The proposed rule would also make significant changes to the process of determining eligibility for two specific groups of beneficiaries: those who are considered “medically needy” and those who are eligible for Medicare Savings Programs (MSPs), which provide Medicare premium coverage and in some cases, cost sharing, through the Medicaid program.
- In the 34 states that offer a medically needy or expense track, those considered “medically needy” must prove they meet Medicaid income eligibility criteria after health expenses have been deducted. People living in institutions are currently allowed to project their future expenses for the purpose of determining their eligibility. The proposed rule would provide the same flexibility to certain registrants living at home and in the community.
- Individuals eligible for MSP are also eligible for Medicare’s Low Income Subsidy (LIS) for prescription drug coverage and the proposed rule would leverage LIS eligibility and enrollment data to streamline the process of MSP registration. Integrating these systems could increase enrollment, as data shows that more than 1.1 million people were enrolled in LIS and eligible, but not enrolled in MSP. Changes include ensuring that LIS requests are also treated as MSP requests, encouraging states to use the definitions of income and wealth that are used to determine LIS eligibility (which tend to be more higher than MSP income and wealth limits), and self-enrollment of LIS applicants who receive Supplemental Security Income.
3. The proposed rule also prohibits certain policies that could act as barriers to enrolling children in CHIP.
The proposed rule would eliminate waiting periods (or no-insurance periods), coverage lock-ups for non-payment of premiums, and annual or lifetime benefit caps for children enrolled in CHIP programs (S- CHIP) distinct. These policies are not allowed in Medicaid or other insurance affordability programs. Before the start of the pandemic, 13 states required waiting times in S-CHIP from one month to 90 days, but two states have since eliminated their waiting times. Moreover, before the pandemic, 14 states imposed a lockout period, usually 90 days, for non-payment of premiums. The proposed rule would also streamline processes to facilitate transitions between Medicaid and CHIP by requiring Medicaid and S-CHIP to accept eligibility determinations made by the other program, develop procedures for each program to accept electronic transfers of information and provide combined advice for transitions between Medicaid and S-CHIP.
4. When fully implemented, the proposed rule is expected to increase coverage (and costs of new coverage) but reduce administrative costs and burden.
The Centers for Medicare & Medicaid Services (CMS) estimates the rule would increase person-years of enrollment (a metric that calculates the number of new months of enrollment divided by 12) by nearly 3 million years. -people after its adoption. fully implemented in 2027 (Figure 1). The largest source of new enrollments (1.5 million new person-years) is due to changes to eligibility processes for MAGI non-enrollees. An additional 1.3 million new enrollment years come from changes related to timeliness and return mail policies that affect all Medicaid enrollees, and the final 0.1 million comes from changes to the CHIP program.
The proposed rule estimates cost increases from Medicaid and CHIP enrollment gains of $23 billion in 2027 ($14.1 billion in federal funds and $9.1 billion in state funds), of which two-thirds result from changes affecting all Medicaid enrollees ($15.3 billion). non-MAGI rules account for $7.4 billion and the remaining $0.4 billion comes from changes to the CHIP program. That year, CMS also estimates $2.6 billion in new Medicare spending, $4.0 billion in subsidy savings provided through ACA market coverage, and $1.2 billion in savings through reducing administrative costs and improving program integrity. The estimated change in federal spending in 2027 would be $12.8 billion.
Estimates of increased coverage and costs are highly uncertain, largely because it is difficult to predict how states and populations will react to new policies. It is also difficult to estimate the number of people who are eligible, but not enrolled, in Medicaid and CHIP currently, especially among those who are eligible for Medicaid on the basis of disability or who are 65 years of age or older.
5. Going forward, CMS invites feedback on how the proposed changes would intersect with the unfolding of the public health emergency (PHE).
As CMS finalizes the provisions of the rule over the next year, the rule’s implementation could coincide with the outcome of the PHE. The continued Medicaid enrollment requirement, which was put in place during the PHE, prevents states from de-enrolling people from Medicaid; however, once the PHE is completed, states will need to make redeterminations and renewals for all enrollees for the first time in more than two years. CMS recognizes that imposing these new requirements on States during the unwinding period following the end of the PHE could be difficult, although the long-term effects are to make it easier for those eligible to enroll and maintain coverage. . Further, recognizing that states will need to make system changes and, in some cases, legislative changes to comply with the requirements, CMS says it is considering an effective date of 30 days after the publication of the final rule. while giving states 12 months to enter into force. full compliance. The agency is seeking comments on the reasonableness of this delay.