Since the onset of the COVID-19 pandemic in early 2020, Medicaid programs across the country stepped up to do what they do best – provide critical health services to millions of Americans and stabilize the nation’s health care system in a time of immense challenge. Congress acted early in the pandemic to provide extra federal support for states to meet this challenge. But Congress’s solution, which was designed to meet the needs of the moment and created in an environment where no one knew how long the pandemic would last, now merits a rethink as enter our third year of pandemic response.
NAMD sent a letter to Congressional leaders detailing specifically what states need. The main theme is the need for certainty, clear rules of the road, and clear federal commitments giving states and territories the confidence to plan for the future. Specifically, we asked that Congress:
- Provide certainty on when Medicaid coverage redeterminations will begin, with at least 120 days advance notice.
- Provide certainty that existing federal guidance on the redetermination period will not change.
- Provide certainty on available financial resources during the redetermination period, specifically by maintaining the current 6.2 percentage point FMAP enhancement through the first quarter of redeterminations and phasing the enhancement down over 12 months after this quarter.
- Provide certainty that underlying Medicaid eligibility rules will not change during the redetermination period.
Here’s why these asks are so important to ensuring the right coverage outcomes for people on the program today.
What Did Congress Do in 2020 – and How Was It Different from Previous Emergencies?
COVID is a generational challenge that didn’t have an off-the-shelf policymaking playbook to direct our nation’s response. What we did have in the Medicaid world is experience with other economic recessions and crises, where shocks to national economic conditions drove up Medicaid enrollment. The most recent example of this type of policymaking was the response to the 2008 recession, when Congress passed the American Recovery and Reinvestment Act of 2009. This law gave Medicaid programs a baseline extra 6.2 percentage points of federal Medicaid match for just over two years, so long as the programs kept their eligibility rules at the levels in place as of July 1, 2008.
The approach Congress took to support Medicaid in COVID was different. In March 2020, Congress passed the Families First Coronavirus Response Act. Like the 2009 law, Congress set extra federal resources at 6.2 percentage points of additional federal match. But unlike the 2009 law, Congress did not put a specific end-date on how long these resources would be available. Instead, they are available for as long as the national COVID-19 Public Health Emergency (PHE for short) is in place. Another key difference is that in addition to requiring states to keep their Medicaid eligibility rules in place, Medicaid programs also have to keep people covered by Medicaid for the duration of the PHE, even if someone is getting health insurance through other means, like an employer.
Why Is This Policy Challenging Now?
The policy rationale in March 2020 was sound. The nation faced an unprecedented emergency, a recession was expected as lockdowns went into effect, and demands for Medicaid services were expected to increase. Most crucially, no one in Congress or the states and territories knew at the time just how long the pandemic would last. Everyone was acting with the best intentions and information available to rapidly stabilize a vulnerable health care system and the people it served.
That said, the effects on the ground for Medicaid have become unworkable. There are a few reasons for this:
- The PHE can only be extended in 90-day increments. Federal laws giving the U.S. Secretary of Health and Human Services the authority to declare a public health emergency sets the maximum length of any one declaration at 90 days. This means that every three months, the Secretary must renew the emergency. We’re expecting the COVID PHE to be renewed for the 12th time in January 2023.
- States will have to redetermine eligibility for everyone – everyone – on Medicaid when the PHE ends. So long as the PHE has been in place, Medicaid rolls have continued to grow. The latest federal data shows national Medicaid enrollment increased by 16.6 million people, or 20 percent, from February 2020 to April 2022. Medicaid is now covering nearly 90 million people, or roughly one in four Americans. Whenever the PHE does end, Medicaid programs will have to review the eligibility status of these 90 million people.
- No one knows when the PHE will end. It’s fair to say when COVID first hit, we didn’t think we would still be on emergency response footing nearly three years later. But so much that rides on the PHE – not just Medicaid policies, but flexibilities for health care providers and many other entities – has led to its constant extension since 2020. While the Secretary is committed to giving 60 days’ advance notice before the PHE ends, that notice has not come and continues to not come. This only creates more uncertainty around how long we’ll be in this situation, creates a complicated set of communication challenges for Medicaid members, their families, and their caregivers, and makes it virtually impossible for Medicaid programs to develop accurate budget and enrollment projections.
The open-ended nature of the PHE makes planning for the Medicaid redetermination work to come incredibly difficult. The scope of the task is massive – revisiting eligibility for 90 million people is unprecedented. Federal partners at the Centers for Medicare and Medicaid Services, in recognition of the challenge and to promote goals around coverage continuity during redeterminations, has given states up to 12 months after the PHE ends to complete redeterminations. While this extra time is critical, the extra 6.2 percentage points of federal match Congress allocated will not be available for that entire 12-month period. These extra federal dollars will go away at the end of the quarter that the PHE ends, likely two months into the 12-month redetermination period. That will create budget pressures on states and territories and cut into available resources to do all of this critical work.
Clear Rules Promote Sound Planning; Sound Planning Promotes Coverage Continuity
The overriding goal of Medicaid agencies as they plan for redeterminations is to get Medicaid members on to the coverage they’re eligible for. That may continue to be Medicaid or it may be coverage on the Exchange, moving to Medicare, or even employer-sponsored coverage. But to ensure that these transitions happen in the right way and people get the coverage they need, states and territories need confidence that the strategies they’ve been preparing for over a year are the right ones. That confidence is undermined by the constantly shifting target for the PHE’s end date.
Congress can fix this and provide the certainty states need. By clearly setting the rules of the road in statute, Congress can provide stability for planning. The necessary elements for Medicaid programs to move forward include a clear date for when the work begins, set far enough in the future that plans can be finalized, additional commitments of federal dollars to match the intensity of the redetermination work, and commitments that the plans that have been laid over the past year under existing federal guidance don’t need to drastically change.
The sooner Congress makes these commitments to Medicaid programs in the states and territories, the sooner everyone gets on the same page and knows what to expect. Clearing the air around what this work looks like is the single most important thing that can be done to ensure people currently on Medicaid get the coverage they need.