New rule simplifies Medicaid enrollment

The Centers for Medicare & Medicaid Services has announced the publication of a final rule aimed at simplifying the Medicaid, Children's Health Insurance Program and Basic Health Program application and renewal processes. Published on March 27, this rule marks a significant effort to enhance enrollment efficiency and ensure eligible individuals enroll in and maintain access to vital health care coverage.

The finalized rule seeks to streamline eligibility and enrollment processes across Medicaid, CHIP, and BHP. The rule also guarantees timely access to Medicaid coverage for “medically needy” individuals, those who have high monthly medical expenses that reduce their countable income to make them Medicaid eligible. States would have a formal option to include projected spending on Home and Community-Based Services and consistent medical expenses in determining these individuals’ Medicaid eligibility. By considering these predictable expenses, CMS aims to expedite enrollment and reduce disruptions that disproportionately affect people with disabilities and chronic conditions.

Additionally, the final rule requires states to take proactive measures to contact applicants and enrollees, resolve information discrepancies, and minimize automatic terminations, ensuring continued enrollment for all eligible populations. States must promptly verify eligibility changes in response to updated information on individuals' insurance affordability program status. The final rule also establishes clear processing timelines for changes in circumstances, transfers between insurance affordability programs, redeterminations of eligibility, and new applications, providing greater accuracy in eligibility determinations and transparency and efficiency in the application process. The rule also removes limitations on CHIP that result in eligible children losing coverage.

This rule follows up a final rule from September 2023 that aims to simplify successful enrollment in Medicare Savings Programs. MSPs help eligible low-income individuals and older adults cover premium and cost sharing expenses in Medicare. The September 2023 rule requires states to proactively initiate applications for individuals who are likely eligible and to simplify complicated income and asset verification requirements.

The final rule goes into effect 60 days following publication in the Federal Register, approximately June 3, 2024.