What the End of the Medicaid Continuous Coverage Requirement Means for Health Care Coverage and Access

Gabriella Aboulafia, Jose F. Figueroa, & Adrianna McIntyre

Update as of February 13, 2023: This article was updated to include an acknowledgment of funding supporting the writing of this article.

Abstract

Medicaid enrollment has grown significantly during the pandemic. This growth has primarily been driven by the continuous coverage requirement, a provision in pandemic relief legislation initially tied to the federally-declared public health emergency (PHE). The end-of-year omnibus legislation decoupled the continuous coverage requirement from the PHE; as a result, states will begin the process of “unwinding” in early 2023, redetermining enrollees’ eligibility for Medicaid. States’ current enrollment procedures and capacity, as well as differences in expected approaches to completing redeterminations, will have significant implications for coverage and access outcomes.

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Enrollment in Medicaid—the state-federal health insurance program for low-income Americans—and its subsidiary program for kids, the Children's Health Program (CHIP), swelled to a historic high of 90 million during the COVID-19 pandemic, representing a 26 percent increase (nearly 19 million people) since February 2020.¹ Legislation passed by Congress at the beginning of the pandemic offered states enhanced federal funding for their Medicaid programs. Normally, states “redetermine” whether Medicaid enrollees remain eligible for the program at least once a year, but as a condition of this new funding, states must maintain continuous coverage for Medicaid enrollees during the federally-declared public health emergency (PHE). All states accepted this enhanced funding; as a result, redeterminations have been paused nationwide and states are not terminating Medicaid coverage due to eligibility changes. But the spending package that Congress passed in December 2022 delinked the requirement from the PHE. States will begin to “unwind” the continuous coverage requirement and resume routine eligibility checks, a process which presents a significant challenge for states. Unwinding-related terminations of Medicaid coverage are expected to start in April, likely exacerbating existing disparities in health care coverage and access.

Research suggests the eligibility redetermination process can disrupt coverage even among people who remain eligible for Medicaid.² Some states have taken preemptive steps to try mitigating coverage loss when unwinding begins, but 15 million people are expected to lose their Medicaid benefits during this process. Nearly half (45%) are expected to lose coverage because of “administrative churning,” meaning that application complexity, paperwork hassles, and other difficulties navigating the renewal process will lead to inappropriate terminations of their coverage, despite remaining eligible for Medicaid.³

One striking feature of these estimates is how coverage loss is expected to vary across income levels, race, and ethnicity, potentially deepening existing inequities in coverage and access. People of color are significantly more likely than white enrollees to have their coverage inappropriately terminated. Among white enrollees projected to lose coverage, 17 percent will be disenrolled for administrative churning; the other 83 percent will be terminated because they are truly ineligible for the program. But this administrative churn share is at least twice as high for other racial and ethnic groups. Nearly two-thirds (64%) and 40 percent of all Latino and Black enrollees, respectively, who will lose Medicaid will have their coverage inappropriately terminated. Losing health insurance coverage—even temporarily—can have dire consequences for people’s health and access to care.²

States are unevenly equipped to respond to unwinding, which will lead to significant variation in how Medicaid redeterminations are experienced across the country. Key differences in state infrastructure and policy include how aggressively states plan to outreach enrollees undergoing redetermination, how effectively information technology systems can handle (and partly automate) the anticipated surge of redeterminations, and personnel capacity to conduct outreach where needed. Whether the state has expanded Medicaid is another critical factor that will affect continuity of coverage when the continuous coverage requirement ends. In states that have not expanded, people terminated from the Medicaid program will not have alternative affordable coverage options if they fall in the “Medicaid gap.” Texas, the state with the highest percentage of uninsured people, is an instructive case study.4 Texas is one of the 11 states that have not expanded their Medicaid programs under the Affordable Care Act, despite overwhelming public support for expansion.5 As a result, Medicaid enrollees in the state must meet strict categorical eligibility requirements, such as being a child, being pregnant, or qualifying on the basis of age or disability, in addition to having very low household incomes. Parents of dependent children must have vanishingly little income to qualify for the program, and Medicaid coverage for childless nonelderly adults is nonexistent in the state.⁶ Despite these strict rules, enrollment in Medicaid and CHIP has grown by 31 percent in Texas (higher than the 26 percent growth nationwide).¹

According to federal estimates, people in non-expansion states are slightly more likely than their expansion-state counterparts to have their Medicaid coverage terminated due to true eligibility changes.³ Yet, at the same time, when people lose Medicaid benefits in these states while still having incomes below the federal poverty line, they are likely to join the ranks of the uninsured because they do not have access to other sources of affordable coverage. Nearly 400,000 people across all non-expansion states who are projected to lose coverage when the continuous coverage requirement ends will fall into the Medicaid coverage gap, likely deepening inequities in states with some of the starkest disparities in coverage and access.³

Analysts have identified Texas as one of the four states where children are most at risk of losing coverage during unwinding. Certain characteristics of the state’s Medicaid and CHIP programs, including more onerous and frequent renewal processes for enrollees and required premiums and enrollment fees for CHIP coverage, serve as potential barriers to successful enrollment.⁷ And, while it is no longer in effect, lingering fears about the Trump-era public charge rule could deter parents who are undocumented or have undocumented family members from completing the redetermination process, even when their children may be eligible for Medicaid or CHIP coverage.⁸ All of these factors also contribute to Texas having the highest uninsured rate among children, even as redeterminations are paused.⁹

Lastly, enrollees who have limited English proficiency (LEP) are at particular risk of inappropriate coverage loss, because language barriers exacerbate the difficulty of navigating an already-complex redetermination process. In Texas, where four in ten residents are Hispanic, one-quarter of people with Medicaid coverage are in households with LEP. Only one state, California, has a higher share (29%).¹⁰

Once the redetermination process resumes, states have 12 months to initiate all renewals.¹¹ Texas is among the handful of states planning to resume operations more quickly; the state intends to complete all redeterminations over a six-month period.^{12 13} Given the expected pacing of the redetermination process and ongoing personnel shortages, concerns about the state’s ability to process up to 5.5 million renewals without anyone falling through the cracks are not unfounded.^{14 15} The shortened redetermination period gives the state less time to build capacity and conduct outreach to enrollees, increasing the risk of inappropriate coverage loss.

States still have time to prepare; while states can start the eligibility redetermination process as early as February, they cannot terminate enrollees’ coverage until April. The Centers for Medicare and Medicaid Services (CMS) has issued a slew of guidance for how states can prepare, including strategies to streamline the renewal process and facilitate continuity of coverage among those who are no longer eligible for Medicaid.¹⁶ The omnibus bill also gives CMS the power to step in if states do not comply with certain redetermination requirements. However, as our analysis of Texas illustrates, outcomes will still vary considerably across states and population subgroups when the continuous coverage requirement ends. How states approach the unwinding process, including how they prioritize renewals and adapt their enrollment processes and the amount of time they plan to take to complete renewals, will have significant implications for Medicaid enrollment, recent gains in coverage, and health equity.

About the Authors

Gabriella Aboulafia (Harvard Kennedy School of Government), Jose F. Figueroa, MD, MPH (Department of Health Policy and Management, Harvard T.H. Chan School of Public Health and Brigham and Women’s Hospital), and Adrianna McIntyre, PhD, MPP, MPH (Department of Health Policy and Management, Harvard T.H. Chan School of Public Health).

Funding Acknowledgment

The writing of this article by authors was supported by the Episcopal Health Foundation.

References

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