Proposed Rule May Prevent Coverage Losses for Dual Eligible Beneficiaries

The CMS proposed rule to streamline the Medicaid eligibility process could potentially prevent coverage losses for around a third of dual eligible beneficiaries, according to data from the Kaiser Family Foundation (KFF).

The rule includes several changes that intend to increase enrollment among Medicare beneficiaries who are eligible for Medicaid but have never been enrolled in the program. In addition, the proposed policies aim to reduce the number of beneficiaries who lose coverage a few months after enrolling and those who lose coverage at the time of renewal due to administrative barriers.

Some policies include encouraging states to use the low-income subsidy definition of financial resources to make the documentation the same for Medicare and Medicaid and requiring states to assist applicants with providing appropriate documentation validating income.

The rule also proposes requiring states to renew Medicaid only once per year, eliminating states’ ability to require an in-person interview for applications, and applying simplified enrollment and renewal requirements that already exist for children and other adults in Medicaid.

CMS estimated that the proposed changes would result in 1.5 million more person-years of Medicaid enrollment, nearly $7 billion in additional Medicaid spending, and almost $3 billion in additional Medicare spending in 2027.

Medicaid administrative spending is expected to decrease as the rule would simplify enrollment and lead to fewer renewals.

KFF estimated rates of Medicaid coverage loss among people who became dually enrolled in Medicare and Medicaid in 2018 but did not have any months of dual eligible coverage in the prior year. Researchers looked at partial-benefit dual eligibles and full-benefit dual eligibles.

The final analysis included 10 million dual eligible beneficiaries in 39 states. Just over one million were newly enrolled dual eligibles.

The brief found that 38 percent of newly enrolled full-benefit dual eligible beneficiaries lost at least one month of coverage within the year after their first month of enrollment. Around three in ten beneficiaries lost over three months of coverage.

Among partial-benefit dual eligibles, 33 percent lost at least one month of coverage and 24 percent lost over three months during the year after they enrolled.

Beneficiaries who lost coverage for more than three months included some who lost Medicaid at the time of renewal in states with more than one renewal period per year and those who lost coverage before the renewal period.

Coverage loss was more common among newly enrolled full-benefit dual eligibles under age 65 compared to those over 65.

Among the 38 percent of newly enrolled beneficiaries who lost Medicaid coverage within the year after enrolling, 79 percent lost all coverage, including coverage of Medicare premiums and cost-sharing and other Medicaid benefits, such as long-term supports and services and non-emergency transportation.

The other 21 percent lost eligibility for full Medicaid but maintained coverage of Medicare premiums and cost-sharing.

The amount of dual eligible beneficiaries who lost Medicaid coverage in the year after enrolling is unexpected as most beneficiaries live on a fixed income and are unlikely to experience changes in eligibility, researchers wrote.

“These findings highlight the challenges people face when trying to access Medicaid and how the new proposed rule could help people more easily navigate the application and eligibility renewal processes,” the brief stated.

Examining how many people re-enroll in Medicaid after losing coverage and if Medicaid coverage loss rates differ for dual eligibles who are not new to the program may help better understand the proposed rule’s impact.

In addition, the unwinding of the COVID-19 public health emergency (PHE) could intersect with the proposed rule, which may affect renewals and disenrollments.