Initiated in response to the COVID-19 pandemic, the Families First Coronavirus Response Act (FFCRA) requires Medicaid programs to keep beneficiaries continuously enrolled through the end of the public health emergency (PHE). The PHE is expected to end on May 11, 2023. Despite FFCRA’s initial timeline, the Consolidated Appropriations Act, 2023 (CAA 2023) established the end of the continuous enrollment provision to be March 31, 2023, in effort to reduce the enhanced federal Medicaid matching funds through December 2023. Accordingly, as of April 1, 2023, states can resume Medicaid disenrollment. The unwinding of the Medicaid continuous enrollment provision has raised concerns about the number of people who will lose coverage.
Since the beginning of the pandemic, Medicaid enrollment has increased due to the continuous enrollment provision. As of September 2022, the total Medicaid/CHIP enrollment had grown to 90.9 million, an increase of more than 27.9% from enrollment in February 2020. KFF estimates that once disenrollment begins between 5 million and 14 million people will lose coverage. Those who are at the greatest risk of losing coverage are ACA expansion adults, other adults, and children. Other populations at high risk are people who recently moved, people with disabilities, and people with limited English proficiency (LEP). Concerns about the number of individuals who will no longer be eligible for coverage with the end of the continuous enrollment provision have prompted CMS to require states to develop plans for the unwinding process.
With the beneficiary disenrollment beginning on April 1, states are facing their own set of challenges. As seen in all workforce areas, state Medicaid programs have a staff vacancy rate greater than 20%. Along with staffing shortages, Medicaid staff need to process a fresh renewal for each beneficiary; they have 12 months to assess a beneficiary’s eligibility and 14 months to complete this process. And states are required to send CMS a monthly report containing all of their “unwinding data” including the number of renewals initiated, total number of people renewed, and number of disenrollments. While staff bandwidth will be further stretched by additional reporting and processing duties, state Medicaid funding will continue to decrease since the Federal Medical Assistance Percentage (FMAP) will drop to 5% in April, 2.5% in July and then 1.5% in October. In addition to this nationwide decrease, if states do not report their unwinding data, CMS will automatically deduct 0.25 percentage points from any state’s FMAP.
On January 5, 2023, CMS released a CMCS Informational Bulletin (CIB) addressing the end of the continuous enrollment provision and the unwinding timeline. The CIB established due dates for state renewal redistribution plans, systems readiness artifacts, and baseline unwinding data based on when states plan on initiating renewals. According to a survey conducted by KFF, as of March 8, 2023, 44 states have already posted their full plan or a summary of their plan publicly.
To alleviate the burden on states to handle the end of continuous enrollment, CMS just rolled out new plans to give beneficiaries some options. Starting March 31st, there will be a special 16-month enrollment period on healthcare.gov that will allow beneficiaries who lose their coverage to enroll in a marketplace plan all throughout the eligibility redetermination period. CMS released this plan in a memo in late January of this year explaining that from 3/1/23 through 7/31/2024, beneficiaries do not need to wait until their coverage ends to start applying; they can report a coverage loss up to 60 days before the last day.
Despite guidance from the CAA 2023 on the unwinding process for the Medicaid continuous enrollment provision, concerns about Medicaid beneficiaries’ loss of coverage remain high. With disenrollment beginning at the start of April, most states have already publicly shared their unwinding plans. Regardless of federal guidance and state preparations, the number of Medicaid enrollees who will lose coverage at the end of this month is highly uncertain. We will continue to follow the Medicaid unwinding process and our Crowell Health Solutions team is available to provide ongoing updates and answer any questions.