Center on Budget & Policy Priorities: Unwinding Watch – Tracking Medicaid Coverage as Pandemic Protections End

WASHINGTON, July 26 (TNSres) -- The Center on Budget and Policy Priorities issued the following unwinding watch on July 25, 2023:

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Our "Unwinding Watch" will highlight key developments as states resume determinations on people's Medicaid eligibility. Previously, the pandemic-related "continuous coverage" requirement safeguarded this coverage for millions of people.

As of April 1, 2023, states may begin ending coverage for people found ineligible or whose redetermination can't be completed for procedural reasons. This so-called "unwinding" process will last through May 2024; start dates for coverage losses vary by state.

States and consumer advocates prepared for this major event, but coverage losses are expected, even among people still eligible.

For more information, see our "End of the Pandemic-Era Medicaid Continuous Coverage Requirement" resource page (https://www.cbpp.org/research/health/resource-lists/end-of-the-pandemic-era-medicaid-continuous-coverage-requirement).

July 2023

July 21st: As states continue to report Medicaid unwinding data, many states have very high numbers of pending renewals - renewals that were initiated but not processed by the scheduled end of an enrollee's eligibility period. In some states, this number includes renewal forms that were submitted before the enrollee's eligibility period ended, but the state or county has not yet processed.

Enrollees' Medicaid coverage should continue until the agency completes the renewal form. But they may not realize that they're still covered - if they haven't gotten a notice confirming their eligibility - and may forgo care or have to make multiple phone calls to determine their status. If a state or county is unable to process a large portion of the renewals they receive in a month, this indicates major operational issues that will likely increase as the state sends out more renewals, handles reapplications from people who lost coverage, and fields phone calls from a growing number of residents who don't know if they have coverage or not.

In other states, a large volume of pending renewals may be the result of the state delaying procedural terminations, either due to system or policy issues it needs to correct or because it has adopted the Center for Medicaid & Medicaid (CMS) strategy to delay procedural terminations by 30 days to give more time to do outreach to individuals who haven't returned their forms. (Procedural denials occur when a person loses their coverage for a reason other than a confirmation that they are no longer eligible. For example, they can happen when a Medicaid enrollee does not receive their paperwork in time, if they do not return requested documents in time, or because the state lost track of paperwork someone sent in.)

Whether pending renewals are caused by a concerning reason (processing backlog) or client-friendly reason (delaying procedural terminations), they have a huge impact on unwinding data that states are reporting. If the pending renewals are mostly people who have returned their forms, this population is disproportionately likely to be determined eligible when those forms are processed, which will affect the percentage of cases renewed vs. terminated. And for those who are found ineligible based on their renewal form, that finding of ineligibility will lower the percentage of denials due to procedural reasons. Conversely, a state that delayed procedural terminations may have a low procedural denial rate in their reported data before the pending renewals are processed. But it will deny a large number of cases for procedural reasons the next month if the forms are not returned.

However, due to how CMS data reporting is currently structured, these pending renewals will never be reported. They won't show up in the next month's report, and the original report won't be revised when these pending cases are processed. While CMS is working on a plan to better capture the outcomes of these cases, it's important to consider the impact of these pending renewals while analyzing procedural denial rates and comparing outcomes across states. States can also report on these outcomes through state reports and dashboards.

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July 20: The Centers for Medicaid & Medicaid Services, the Department of Treasury, and the Department of Labor sent a letter urging employers and health plan issuers to grant people losing Medicaid and transitioning to employer-sponsored insurance (ESI) the same special enrollment period (SEP) that will be used on HealthCare.gov for people transitioning to marketplace coverage. The temporary marketplace unwinding SEP is available until July 31, 2024, for anyone who loses Medicaid/CHIP between March 31, 2023, and July 31, 2024.

Currently, federal law requires that people who lose Medicaid/CHIP be given an SEP of at least 60 days to enroll in an employer-based plan. Employers and plans can offer a longer period, but that is not required. Given the complexity of the unwinding process, 60 days may not be enough time for many people. They may not receive notices that they are losing coverage on time or at all, or they may be confused about whether they can enroll in subsidized marketplace coverage instead of ESI. People with an offer of ESI that is considered affordable (does not exceed 9.12 percent in 2023) are not eligible to receive financial help with marketplace coverage.

An estimated 3.8 million people losing Medicaid/CHIP due to unwinding have an affordable offer of ESI. Some of these people are in mixed coverage status households, where some members are eligible for Medicaid/CHIP or marketplace coverage with financial assistance, and others are eligible for ESI. Aligning the SEPs would make it easier for more people to make a successful transition to another form of affordable coverage, prevent coverage gaps, and ensure people have ongoing access to needed care.

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July 18th: The Centers for Medicare & Medicaid Services (CMS) released two documents that provide insights into how the agency is working with states to address their failures in following federal rules in eligibility redetermination processes, which can contribute to coverage losses. CMS's July 18 release shows that the majority of states are out of compliance with basic renewal functionalities like conducing ex parte renewals for all enrollees (26 states), allowing renewal through all required modalities, including online and by phone (19), and supporting transitions to marketplace coverage (6). CMS describes both actions states have taken voluntarily to address these failures and steps the agency can take where state actions are not sufficient.

Summary of State Mitigation Strategies for Complying with Medicaid Renewal Requirements Described in the Consolidated Appropriations Act, 2023. This document describes CMS-approved mitigation strategies that specific states adopted to address areas of non-compliance with Medicaid renewal requirements, as of March 31, 2023. Since before unwinding began, CMS has worked with states to identify gaps in compliance with Medicaid renewal requirements and to identify alternative strategies states can use to address these shortcomings while working to fully meet the requirements. These strategies are designed to help protect coverage for people who are eligible. States that aren't in compliance must adopt mitigation strategies as a precondition for receiving the increased Medicaid matching rate that is in effect during the unwinding period.

The summary list posted by CMS includes ten mitigation strategies that various states have adopted, including pausing procedural terminations until approved mitigations are implemented, conducting manual data checks as an alternative to conducting fully automatic (or ex parte) renewals, and adopting approaches to facilitate renewals when required online or telephonic functionality is not in place.

CMS had not previously shared these mitigations or the extent to which states have adopted them. The list indicates that only 16 states had not adopted any mitigations as of March 31, although some of those states have experienced rapid coverage losses since unwinding started, which in some cases could be the basis for future CMS oversight activity, as described below.

Fact Sheet: Returning to Regular Medicaid Renewals: Monitoring, Oversight, and Requiring States to Meet Federal Requirements. This fact sheet reiterates CMS's commitment to keeping eligible enrollees covered during unwinding and describes the levers that CMS has to ensure states' compliance with federal requirements that are designed to protect enrollees during the renewal process.

During the unwinding period, CMS can withhold the enhanced Medicaid matching funds from states that do not remedy gaps in their eligiblity processes that violate federal requirements. If needed, CMS can put states on corrective action plans to align eligiblity renewals with federal requirements. If a state fails to implement a corrective action plan, CMS can require them to pause procedural terminations and impose financial penalties.

CMS has not yet put any states on a corrective action plan, but the fact sheet provides several examples of states that have taken steps to avoid losing the increased Medicaid matching rate. For example, one state paused procedural terminations, reinstated eligiblity, and conducted additional outreach in response to documented violations.

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July 1st: Beginning July 1, Congress authorized CMS to withhold federal Medicaid funding from states that do not report unwinding data that they are required to report to CMS under the Consolidated Appropriations Act, 2022. CMS released frequently asked questions (FAQs) about states' data reporting obligations, and CMS's compliance responsibilities, on June 30. The agency is also working on a new rule to provide further clarity about these new requirements (which are set forth in section 1902(tt) of the Social Security Act).

The CAA requires states to submit, and CMS to make public, monthly unwinding data from April 2023 through June 2024; the new FAQs include information on required reporting elements, acceptable data sources, and state reporting deadlines. Some of the information in the FAQs has been issued previously, and indeed states have already been reporting data to CMS. CMS has not yet posted data from the first months of unwinding but is expected to begin posting data -- as also required by the CAA -- later this summer.

The FAQs reiterate that if states do not provide the required data in a timely manner, the CAA requires CMS to reduce the federal medical assistance percentage (FMAP) determined for the state for that quarter by the number of percentage points (not to exceed 1 percentage point) equal to the product of 0.25 percentage points and the number of fiscal quarters during the period for which the state has failed to satisfy such requirements.

The FAQs also note that in states running state-based marketplaces (SBM), the penalty for late reporting would apply if an SBM fails to timely report required data. CMS notes that it will not levy this penalty on states making a good-faith effort to submit the required data in a timely manner. Finally, CMS explains that if it takes an FMAP reduction and the state later submits the data, CMS does not intend to restore the lost federal financial participation because CMS would not consider the delayed submission to be timely.

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June 2023

June 30th: CMS released an updated chart showing state timelines for initiating unwinding-related renewals. The chart shows when states are initiating unwinding-related renewals; the effective date of the first anticipated eligibility termination date for the first cohort of unwinding renewals; how long states anticipate taking to renew their Medicaid population; and whether and how states are prioritizing individuals they identify as likely ineligible (the so-called "COVID-protected") groups. The chart will help put unwinding data in context. For example, states prioritizing likely ineligible individuals in the early months of unwinding may have higher termination rates than states that do not.

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June 12th: In response to large coverage losses during the first two months of unwinding, the Secretary of the Department of Health and Human Services (HHS) on June 12 encouraged governors to step up their efforts to protect people from losing coverage, especially for procedural reasons such as not returning a renewal form. The Secretary's letter encouraged states to continue partnering with stakeholders to get the word out about unwinding. The Centers for Medicare & Medicaid Services (CMS) launched new outreach and educational resources to support an "all hands on deck" strategy to reach enrollees.

Alongside the letter, CMS unveiled several new flexibilities for states to help minimize terminations for procedural reasons. Since the pandemic, states and CMS have agreed on waivers to make it easier for people to renew their coverage, including by streamlining workload for state agencies that are handling a record number of renewals. These waivers (called "e-14 waivers") are granted under section 1902(e)(14) of the Social Security Act, which authorizes waivers needed to "ensure that states establish income and eligibility determination systems that protect beneficiaries."

CMS is attempting to address problems that it and states have identified in the early months of unwinding, including making it easier for enrollees to complete redeterminations and for people whose eligibility was terminated for procedural reasons to reenroll. For example, under the new flexibilities:

States can delay procedural terminations for one month while they conduct targeted outreach about renewals. Given findings about low awareness among enrollees about the need to complete renewal forms, this strategy could help boost targeted outreach and protect people from losing coverage when they are still eligible.

States can designate pharmacies, community-based organizations, and/or health care providers to facilitate reinstatement of coverage for people who were recently disenrolled for procedural reasons. This would allow people to regain coverage at the point of service, pending a final eligiblity determination.

States can reinstate eligibility effective on the individual's prior termination date for those who were disenrolled based on a procedural reason and are subsequently redetermined eligible for Medicaid in the 90-days after they were disenrolled.

Medicaid managed care plans can help enrollees complete their renewal forms (but not sign on their behalf).

Along with the new flexibilities, it is critical that CMS continue its monitoring and oversight efforts to ensure that states comply with federal rules regarding renewals and act quickly to address any violations. Not all coverage losses stem from violations, but for those that do, the Secretary's letter notes that HHS "will not hesitate to use the compliance authority provided by Congress, including requesting that states pause procedural terminations under conditions outlined by the Consolidated Appropriations Act, 2023, should it be needed."

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June 5th: As states unwind, they need to ensure their eligibility systems are reliable and well tested. The Centers for Medicare & Medicaid Services (CMS) has required states to submit multiple documents, called System Readiness artifacts, to demonstrate their readiness with technical system and process changes associated with unwinding. Some states have chosen to post their artifacts publicly. These artifacts are an opportunity for interested parties, particularly community advocates, to acquire insight into the technical issues and client scenarios that state agencies are prioritizing as they unwind.

Although the length of the System Readiness documents varies across states, some are detailed enough to illustrate the specific tests and scenarios that state IT workers are considering during this time. Louisiana and Kentucky are good examples of detailed System Readiness documents. Making documents publicly available is important, so advocates should consider reaching out to their state if these documents have not been published yet.

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May 2023

May 30th: A survey of Medicaid enrollees, released by KFF last week, points to the need for enhanced outreach to help people either retain their coverage or to transition to other coverage that they might be eligible for.

Among KFF's key findings:

Most Medicaid enrollees were not aware that states are now permitted to resume disenrolling people from Medicaid. This could mean that people are not focused on renewal notices that states are starting to send out and may not realize that action is required.

Nearly half of Medicaid enrollees say they have not previously been through the Medicaid renewal process, which was paused for three years. KFF points out that this group could be less likely to understand the importance of completing renewal forms to retain coverage.

These findings, coupled with early data revealing a high percentage of procedural terminations (which occur when someone doesn't return renewal forms, for example; it does not mean they no longer meet eligibility criteria) underscore the need for the Centers on Medicare & Medicaid Services (CMS), states, and stakeholders to redouble efforts to communicate that current enrollees should watch their mail and take action, if needed, to renew their coverage.

CMS has posted various communication resources that states and stakeholders can use to communicate about eligibility determinations resuming. CBPP developed these community talking points. Other unwinding resources are also available from organizations such as Community Catalyst, Georgetown Center for Children and Families, and State Health and Values Strategies.

KFF also found that more than 4 in 10 people whose only coverage is Medicaid wouldn't know where to look for other coverage if they lose Medicaid during unwinding or would end up uninsured. This also points to a need for increased education and outreach to help connect people to marketplace or employer sponsored coverage that could be available to them.

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May 24: Data from early unwinding states give some reason for concern. Arkansas and Florida both terminated coverage for more than half of the enrollees for whom they completed renewals. The vast majority of those who lost coverage were terminated for procedural reasons - meaning they didn't submit the renewal form or other required documentation - and not because they were determined to be no longer eligible for Medicaid. Both states said they prioritized initial redeterminations for enrollees they've identified as likely ineligible but had "protected" while the continuous coverage requirement was in effect. Indiana and Iowa similarly have very high rates of procedural terminations, while Arizona and Pennsylvania appear to be successfully renewing most of their enrollees.

More information is needed to fully understand these numbers. For example: will there be a spike in applications by eligible people who lost coverage and reapply? Are there stories of people not receiving notices or not being able to get through to call centers to complete their renewals? Such information would suggest that states need to increase their outreach efforts and scrutinize their operations to prevent high rates of procedural terminations. A high rate of procedural terminations might be less problematic in a state that also has a very high rate of ex parte (automated) renewals, because people who receive forms in the mail in those states are more likely to no longer be eligible and may choose to not return renewal forms.

Organizations such as Florida Health Justice Project are documenting compelling stories of situations where people are falling through the cracks, because Florida hasn't expanded Medicaid or due to poor communication by the state. How Florida and other states respond to stories and other data in their own states will be telling as unwinding unfolds over the next year.

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May 12: The Centers for Medicare & Medicaid Services (CMS) recently launched its Enrollment Assistance Personnel (EAP) program, which will provide outreach and assistance for people no longer eligible for Medicaid who need help transitioning to ACA marketplace coverage. The program will operate in 23 counties across 12 states (Ariz., Fla., Ill., La., Mich., Mont., N.C., Okla., S.D., Tenn., Texas, and Utah), and CMS anticipates the program will begin in earnest in June.

The EAP program, run by private contractor Cognosante, will supplement existing Navigators and enrollment assisters in these counties, conducting direct outreach, providing ACA marketplace application and enrollment assistance, and referring people to other organizations and resources when appropriate. In some states, Cognosante may also sub-contract with existing assister organizations.

CMS requires that EAP staff receive training at the same level as Navigators and observe the same consumer protections, including protection of personally identifiable information and a requirement to provide unbiased information about ACA marketplace plans. Like Navigators, EAP staff can't recommend a specific marketplace plan and don't receive commissions from health insurance companies.

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May 1st: A second group of 14 states have begun their first terminations of Medicaid coverage as part of unwinding the continuous coverage provision. Some enrollees in Connecticut, Florida, Indiana, Iowa, Kansas, Nebraska, New Mexico, Ohio, Oklahoma, Pennsylvania, Utah, Virginia, West Virginia, and Wyoming lost Medicaid coverage for the first time in over three years effective May 1. Arizona, Arkansas, Idaho, New Hampshire, and South Dakota terminated coverage for additional enrollees in May after beginning terminations in April.

We can expect to see data trickling in over the next couple of weeks that will begin to give an indication of outcomes in the first 19 states that started terminating coverage in April or May. States must submit reports to the Centers for Medicare & Medicaid Services (CMS) by May 8, and some of them will likely publicly post those reports after submitting them, as West Virginia has begun doing for prior months. Other states have dashboards with detailed unwinding data that may soon reflect April activity, including Iowa, Pennsylvania, Utah, and Virginia. And we expect CMS to begin releasing data on ex parte renewal rates and call center wait times across states sometime in June.

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April 2023

April 26: People who are no longer eligible for Medicaid following a redetermination may be eligible for Affordable Care Act (ACA) marketplace coverage with premium tax credits, but only if they do not currently have an offer of employer-sponsored insurance (ESI) that is considered affordable (employee share of premiums does not exceed 9.12 percent of income in 2023).

An estimated 3.8 million people losing Medicaid eligibility have ESI or an affordable offer of ESI, but they will need to act quickly to transition to ESI. Employers must provide people losing Medicaid or CHIP at least 60 days following loss of coverage to enroll in ESI (although they have the option to provide more time). If people miss this window, they qualify for the Unwinding Special Enrollment Period and can enroll in ACA marketplace coverage any time before July 31, 2024, but they do not qualify for premium tax credits or cost-sharing reductions to lower the cost of coverage and care.

For more information on helping people losing Medicaid/CHIP transition to ESI, see our FAQ: Transitioning from Medicaid to Employer-Sponsored Insurance.

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April 5th: A letter from the U.S. Department of Health and Human Services Office for Civil Rights (OCR) reminds state health officials of their obligations to provide people with limited English proficiency (LEP) and people with disabilities meaningful language access and effective communications to ensure those who remain eligible maintain access to coverage during unwinding.

Under long-standing anti-discrimination laws, all individuals must have an equal opportunity to participate in federally funded health programs, including Medicaid. This means states must provide communications to people with disabilities that are as effective as their communications with all other groups, and they must take reasonable steps to provide meaningful language access to people with LEP.

OCR's letter provides examples of best practices and offers to provide technical assistance to states.

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April 1st: States can resume Medicaid coverage terminations as of April 1. Five states -- Arizona, Arkansas, Idaho, New Hampshire, and South Dakota -- have done so.

Unwinding enrollment data for these five states are pending. All states must submit reports with redetermination data each month to the U.S. Department of Health and Human Services.

The data will be made publicly available in the coming months and will include metrics such as the number of procedural terminations, rates of renewals conducted ex parte (that is, automatically), and state call center wait times. The reports will help stakeholders monitor states' unwinding activities in this crucial period.

The month of a state's first terminations depends on when they initiated the unwinding process. From here, we expect about 14 states to have their first set of terminations in May, 22 states in June, and nine states in July.

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