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Medicaid: Unwinding From the Public Health Emergency

By Emily Blanford  |  April 6, 2022

As they anticipate an end to the federal COVID public health emergency, states are planning for a halt to enhanced Medicaid funding, which could affect their budgets and potentially lead to millions of people losing health coverage.

When the pandemic began, Congress passed legislation to support states with their response to the public health emergency.

One bill, the Families First Coronavirus Response Act , included provisions to support Medicaid programs. As businesses began shutting down and unemployment increased, the bill provided enhanced federal funding of 6.2% over the normal matching rate to states in anticipation of a significant increase in Medicaid enrollment. Now states are planning for the additional funding to end, which could lead to a major shift in health care coverage as potentially millions of individuals are disenrolled from Medicaid.

Medicaid Enrollment Up

Since March 2020, more than 11 million people have newly enrolled in Medicaid. Much of that increase was due to a requirement that states maintain Medicaid coverage for all individuals who enroll over the course of the pandemic, even if individuals experience a change in circumstance that would normally make them ineligible for the program. Typically, Medicaid has an amount of churn, with individuals coming on and off the program, but the continuous coverage requirement mostly eliminated turnover during the pandemic.

When the health emergency comes to an end, states will resume normal eligibility determination processes, including a reassessment of eligibility for everyone currently enrolled. The Centers for Medicare and Medicaid Services released guidance in August 2021 and March 2022 giving states a year to initiate all eligibility reassessments and 14 months to complete them.

With the recent extension of the of the public health emergency, states will now have at least until July 15 to prepare for resuming normal operations. The Biden administration stated it would provide 60 days’ notice before the end of the emergency to allow states time to prepare for the withdrawal of enhanced federal funding and start the reassessment process. 

Medicaid agencies have been hard at work planning for the end of the emergency, but officials remain concerned about getting all the reassessments done due to significant increases in workload and high staff turnover. According to a recent Kaiser Family Foundation survey, 27 states have a plan for completing the reassessments. Some will prioritize enrollees who appear ineligible first; others plan to approach the reassessments on a rolling, monthly basis; and another group will take a hybrid approach to get the work completed.

State Approaches Vary

Some states, such as Colorado, are planning to take the full year to complete the reassessment process to include ongoing outreach to Medicaid beneficiaries. Oregon enacted legislation outlining an outreach process and creating a new health coverage option for those losing Medicaid eligibility. Other states are hoping to move more quickly to minimize potential impacts to state budgets due to expenditures for ineligible individuals once the enhanced federal funding comes to an end. For example, in its budget, Ohio requires its Medicaid agency to complete all reassessments within 90 days, using third-party data sources and systems.

States are faced with a daunting administrative task of outreach and data collection to fully reassess Medicaid eligibility when the continuous coverage requirement comes to an end. Whether it gets done in 90 days or takes a year, there could be a significant shift in health care coverage across the country, with the potential for millions to lose their current Medicaid coverage.

States and the federal officials hope to complete the reassessment work with minimal disruption. NCSL continues to monitor this process and will keep members updated regarding all the moving pieces.

Emily Blanford is a program principal in NCSL’s Health Program.

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