Situating Medicaid Agencies’ Future Work in Today’s Realities

This week, the Kaiser Family Foundation released the 22nd Annual Medicaid Budget Survey for state fiscal years 2022 and 2023. If you work in the world of Medicaid, you know this report well. It’s a regular fall-time event in the health policy world, marking another collective trip around the sun. Most importantly, it captures the ongoing evolution of the Medicaid programs.

If you haven’t seen the report, check it out. As you read it, you might consider three themes encircling all the policy decisions and program operations described in the report:

1. Current state agency workforce realities;
2. Robust activity at federal level; and
3. The upcoming mid-term elections and the potential for leadership change.

Medicaid played the role it was intended to play during the pandemic. It was our country’s safety net and did exactly what it was meant to do: it expanded and fast. The program was critical to saving the lives of thousands of members who needed health care during the last two and a half years.

Soon it will be time for states to unwind all of the changes and return to some semblance of normal. That means the eligibility of every current Medicaid member will be reevaluated once the national COVID-19 Public Health Emergency (PHE) ends. That’s a tall order for states, given that Medicaid membership has grown to more than 89 million, the largest in its history.

The PHE unwinding will be dominant for the foreseeable future, and Medicaid agencies are as prepared as they can be. They’ve been working diligently over many quarters – on strategic planning, systems updates, eligibility redetermination planning and training, outreach and communication to members, budgeting, and more.

States are crouched and ready at the starting line.

When U.S. Department of Health and Human Services Secretary Xavier Becerra gives the green light to start unwinding, the states will be in charge of the “single largest health coverage transition event since the first open enrollment period of the Affordable Care Act”, as the Centers for Medicare and Medicaid Services (CMS) states.

Here’s the concern: across all states, the Medicaid agency workforce is significantly compromised. Data from NAMD’s recent Insight Survey found that the average vacancy rate in FY2022 for Medicaid agencies was 17 percent. One in four Medicaid agencies have a vacancy rate that is over 20 percent – in some cases in the 30 percent or even 40 percent range.

Can you imagine striving to be successful at your workplace with 30 percent of the positions unfilled?

Medicaid Directors are being incredibly resourceful and creative in efforts to fill those positions, but it’s an incredibly challenging place to be.

A second contextual theme is the considerable amount of activity occurring from federal partners. CMS has a robust regulatory agenda that will have significant changes for the way states operate. For example, CMS has re-opened the continuous enrollment rules from the Families First Coronavirus Response Act for comment, meaning that CMS might revert its initial interpretation of statute and, as a result, states would have to go back in time to 2020.  In other words, there’s a possibility “states will be rewinding while unwinding”, as one Director described it.

CMS has also released an expansive proposed eligibility, enrollment and renewal regulation. If states have to put this rule in place during the 12+ months of unwinding, it will create a major distraction because states could be conducting eligibility redeterminations while the eligibility processes are in flux. Both of these events also have the potential to create confusion for Medicaid members, many of whom have traditionally struggled with eligibility requirements and redeterminations.

Congress is also a wild card in the mix and could make decisions before the end of the calendar year that would undercut all the planning and preparation states have done to date. States are counting on a “go date” of February 1 to start redeterminations based on the current PHE renewal and an enhanced federal match through March 31, 2023. They have planned for and budgeted around CMS guidance under current law. Any change to these assumptions or major changes from current statute would wreak havoc on state plans.  States operate best on a steady, consistent path, so keeping to the established assumptions made for budgets and timelines is critical.

A third contextual point is the 36 upcoming gubernatorial elections, which can lead to changes in leadership at many levels. Because Medicaid is shaped and administered by states, the program looks different in every state based on the priorities of the elected state leadership.  Medicaid programs ebb and flow with the prevailing elected leadership so it’s critical that elected leaders have the information needed to understand the complexities of this complex program. They will need to know what is possible, what’s not, and the trade-offs for the program, particularly during this unique period of transition.

So, as this year’s Kaiser budget survey report illustrates so beautifully, Medicaid directors and their teams accomplished a tremendous amount in 2022 despite sailing through very choppy waters. The coming year will also be challenging for Medicaid as it seeks to unwind from the public health emergency and NAMD will be there to support and elevate the work.