Continuous Eligibility Policies Can Reduce Medicaid Churn Among Kids

Continuous eligibility policies can help reduce Medicaid churn and disenrollment among children, according to an issue brief from the Kaiser Family Foundation (KFF).

The year-end spending legislation includes a requirement for all states to implement 12-month continuous eligibility for children in Medicaid and the Children’s Health Insurance Program (CHIP). If passed, children could maintain coverage for a full year even if they experience changes in circumstances, such as income fluctuations.

States must renew coverage for most children in Medicaid and CHIP no more than once every 12 months, but children in states without 12-month continuous eligibility policies may lose coverage before the renewal period due to circumstantial eligibility redeterminations.

As of January 2022, 24 states have opted to provide 12-month continuous coverage for children in Medicaid. Continuous Medicaid enrollment is also required throughout the COVID-19 public health emergency (PHE).

KFF researchers used Medicaid claims data from 2017 to 2019 to determine how continuous eligibility policies impacted disenrollment and churn among children in Medicaid. The brief compared outcomes in states with and without 12-month continuous eligibility.

Medicaid disenrollment rates were lower for children in states with 12-month continuous eligibility policies in the months before annual renewal and at the 12-month mark. The cumulative disenrollment rate in states with continuous eligibility was 9.9 percent by month 12, compared to 14 percent in states without continuous eligibility.

The share of children who disenrolled and then re-enrolled in Medicaid within the year—known as churn—was also lower in states with continuous eligibility policies. In states with the 12-month policy, 2.9 percent of children experienced churn compared to 5.3 percent in states without the policy.

After the annual renewal, the disenrollment and churn rates more than doubled, researchers found. The cumulative disenrollment rate grew from 11.8 percent in month 12 to 29.2 percent in month 15. Children may be disenrolled at annual renewal because they are no longer eligible for the program, or they could experience barriers with the redetermination process despite remaining eligible.

The disenrollment rate increased in both states with and without continuous eligibility policies, but the growth was smaller in states with the policy. For example, the disenrollment rate increased from 14 percent to 37.8 percent in states without continuous eligibility and grew from 9.9 percent to 29.8 percent in states with the policy.

Similarly, the cumulative churn rate increased from 4 percent in month 12 to 10.5 percent in month 15, indicating that children may have been disenrolled due to administrative barriers. The churn rate increased by 5.2 percentage points to 8.1 percent for states with continuous eligibility and grew 7.9 percentage points to 13.2 percent for states without continuous eligibility.

Churn rates increased among all racial and ethnic groups after annual renewal, but the increase was the most significant for Hispanic children, highlighting potential health equity issues. Hispanic children had slightly higher cumulative churn before yearly renewals, but the gap widened after the renewals.

At 15 months, the churn rate for Hispanic children was 12.5 percent, compared to 11.4 percent for Black children, 10.4 percent for White children, and 9.1 percent for Asian children.

“This suggests Hispanic children may be more likely to experience income volatility or be disenrolled for procedural reasons at annual renewal compared to children of other races,” researchers wrote.

The findings emphasized how continuous eligibility policies can help reduce Medicaid disenrollment and churn rates among children. If Congress passes the omnibus bill and expands the 12-month continuous eligibility policy to all states, it could prevent children from losing Medicaid coverage during renewals.

Additionally, some states have enacted multi-year continuous eligibility for children in Medicaid. Oregon was the first state to extend continuous eligibility for children to age six. Washington has submitted a waiver renewal application, while New Mexico and California are in the early stages of expanding continuous eligibility policies.