The Unwinding Odyssey: Understanding Where We Are Today

Unwinding the continuous coverage requirement that preserved the coverage of all the folks who became eligible for Medicaid during the COVID-19 public health emergency has been a herculean job for Medicaid leaders, CMS officials, managed care plans, health care providers, community-based organizations and advocates. By that I mean, an effort that required a huge volume of work but also, as was required of Hercules under his mythical twelve labors, ingenuity and capacity to adapt and learn from changing circumstances.

All involved have been informed and influenced by the process. We all understood that the effort would be multi-faceted, dynamic and would evolve, and that partnerships with members, providers, plans and community-based stakeholders would be critical. Collectively, we recognize both the challenges of day-to-day life for people served by the program and also the reality of the myriad eligibility scenarios that are reflected across the country, depending on the makeup of families and households. We are also all committed to reducing burdens and smoothing processes for eligible people. An important companion piece, however, is that Medicaid is a publicly funded insurance program, and states and territories are required by federal law to document the eligibility of its members and steward the finances of the program. All of these are essential elements of how programs have approached the task of unwinding.

As detailed below, the entire story of unwinding is not yet told. There are hugely important indicators of progress – 56.4 million people have had their coverage renewed, 61% of renewals are being conducted on an ex parte (automatic) basis, and Medicaid programs have effectively used emergency authorities, technology supports, and multi-modal outreach and engagement strategies, in partnership with a broad range of partners. That said, over 12 million renewals remain to be completed and there is important work ongoing to track the outcomes of the 25 million people who have been disenrolled and strengthen coverage continuity for eligible people.

The context in which Medicaid programs have been operating

Unwinding hasn’t occurred in a vacuum. Immediately following the sunset of the federal COVID-19 public health emergency in March 2023, Medicaid programs were mandated by Congress to launch the process. This was complicated by a number of factors. Many Medicaid programs handle eligibility through a sister agency, some partner with county-level government, and some have embedded it in integrated processes with their state-based marketplaces. This required additional effort and coordination, especially where a sister entity handles other assistance programs, such as SNAP benefits. And Medicaid programs continued to face severe state workforce constraints and challenges in timely standing up contractual support for systems changes and adoption of technical solutions to support call center and website functionality.

We and our members appreciate that CMS approached this work with an emphasis on how states could achieve compliance with federal requirements, as opposed to taking strict compliance actions. This acknowledged the challenging realities of the unprecedented volume and complexity of the work, state workforce constraints, legacy systems and an already full pipeline of systems projects, and the need to re-engage with people who had not had to think about eligibility renewal during the COVID-19 public health emergency.

Even in the context of this mitigation-oriented approach, there were some notable hurdles. Most notably, a shift in guidance in August 2023 around how programs were required to process ex parte, or automatic, renewals necessitated additional systems and operations work in a number of states that further complicated the process.

Also of note is that CMS issued six major pieces of rulemaking (eligibility and enrollment, managed care, access, nursing facility staffing, federal data hub and DSH limits) in Spring 2024 that have major policy and systems implications for Medicaid programs. And following the Supreme Court’s decision in Loper Bright around the balance of authority between courts and federal agencies in interpreting compliance with the Administrative Procedure Act, some of these regulations are already being or likely to be challenged. This policy context is important to acknowledge because it reflects both a watershed year for the Medicaid program and also many, many concurrent obligations and uncertainties for states and territories that are presenting major operational challenges.

Where we are now 

So, where are we with unwinding? KFF is reporting through its unwinding tracker that as of September 2024:

• Most states have substantially completed their unwinding processes, but three have extended their renewal periods

• Medicaid programs have reported renewal outcomes for 9 in 10 members

• 56.4 million members have had their coverage renewed

• 25.2 million people have been disenrolled
• 12.4 million renewals remain to be completed

It’s both heartening to see how many people have been renewed, and a point of mutual concern and interest to understand the status of folks who have been disenrolled. These include people who are no longer eligible but evidently also otherwise eligible people—notably, children – who were not able to renew. All of us want to ensure that those eligible folks can readily and rapidly resume their coverage.

For a number of important reasons, unwinding is not yet complete. A number of states (e.g. North Carolina, Alaska and New York) have planned to take longer than originally anticipated 12 months because how they have staged affected eligibility groups. Many states also continue to process renewals that have been initiated but not yet completed. It’s also important to note that the number of folks served by Medicaid ongoing will continue to be affected by reinstatement of coverage for eligible people as well as enrollment of newly eligible people across the country; most notably in states that have recently expanded Medicaid (North Carolina and South Dakota). An April KFF opinion poll showed that although 1 in 5 were disenrolled at some point during 2023, 47% re-enrolled and 28% found other coverage.

In addition to vigorous, multi-modal outreach and engagement to cue people served by Medicaid that their coverage had to be renewed, Medicaid programs invested heavily in improving systems to smooth processes for people. Perhaps most significant among these efforts was increasing the rate at which renewals were conducted on an ex parte or automatic basis, which greatly reduces the need for additional follow-up and documentation of eligibility from members themselves and also reduces administrative costs and burden for Medicaid programs. KFF is reporting that of people renewed, 61% were done ex parte and 39% by renewal form. Ex parte rates are improving, with many states showing dramatic increases. And incidence of procedural terminations is decreasing.

What has been most helpful to Medicaid programs

Special mention must be made of the role of the United States Digital Service in this work. Have you heard of USDS? Until this past year, the answer may have been no, but during the intense early stages of the unwinding, USDS was closely and instrumentally involved with extraordinary advisory work with states including Alaska, California, Hawaii, Kansas, Nebraska, New Jersey, New York, Pennsylvania, South Carolina and Wisconsin to streamline their processes, increase the rate of automatic renewals, and reduce administrative burden. Truly a kind of cavalry, you can learn a bit more about USDS’ work here.

Also significant is that many states have used federal flexibilities known as (e)(14) waivers to support smooth renewals. Notable examples of this include:

• Accepting updated contact information from the United States Postal Service and managed care plans

• Enrolling based on SNAP or TANF eligibility
• Renewing if no income data is returned from data reports

Further, all states did extensive systems work and partnered with MCOs and a diverse range of community organizations. Overwhelmingly, states plan to retain the types of outreach that they used during unwinding and are using online accounts and application portals, many of which process both MAGI and non-MAGI applications. As of January 1, 2024, all Medicaid programs implemented continuous eligibility for children served by Medicaid and CHIP. Thirteen programs are planning to expand this approach via multi-year continuous eligibility for kids up to age 6, using Section 1115 waivers. We have also seen nearly universal uptake of the option to extend postpartum eligibility up to one year. Taken as a whole, these are all important means of preserving continuity of coverage for people who are eligible for the program.

What is upcoming?

As noted above, states continue to bring the important and complex work of unwinding to closure and intersect with the next stages of the process: documenting compliance with eligibility standards and meeting the requirements of the new eligibility and enrollment rule. NAMD appreciates the suite of guidance that CMS is in the process of releasing, including:

• August 19th guidance on continuity of coverage for people who receive Medicaid-funded home and community-based services; and
• August 29th and September 20th guidance on requirements for compliance plans.

It is especially helpful that CMS has acknowledged the continuing “unusual circumstances” of workforce constraints and systems challenges by extending the original 14-month cap on completion of unwinding until December 31, 2025. We are also eager to see what CMS can advise about potential permanency of (e)(14) waivers. These are important features of a mitigation-oriented approach that is giving Medicaid programs until the end of calendar year 2026 to come into full compliance with federal eligibility requirements.

As all of that Medicaid renewal work continues, states are also continuing to support transitions to marketplace coverage, and on the cusp of the annual open enrollment period that starts November 1, it will be especially important to alert people who are no longer eligible to the availability and affordability of marketplace plans. We are also interested to see that CCIIO is launching a major, multi-year effort to modernize the process of marketplace enrollment and will benefit from partnering on that.

In conclusion

Unwinding is important, multi-faceted, and a story whose final chapter hasn’t yet been written. Acknowledging both the challenges that Medicaid programs have faced and the enormous progress and learning that they have taken from the process is crucial in telling that story.