What Happens When Medicaid COVID-19 Flexibilities, Funding Expire?

Temporary Medicaid coronavirus flexibilities and funding may be about to expire and CMS needs to be clearer about transition guidelines in order to help states be prepared, Kaiser Family Foundation (KFF) noted in a recent issue brief.

The Families First Coronavirus Response Act (FFCRA) established Medicaid maintenance of eligibility requirements in order to infuse more funds into Medicaid programs during the height of the coronavirus pandemic.

CMS raised the federal medical assistance percentage (FMAP) by 6.2 percentage points as state Medicaid programs struggled to meet the increased demand for healthcare. Later on in the crisis, the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act pushed the FMAP to 14 percent through the end of June 2021.

Most of the maintenance of eligibility requirements end with the public health emergency. At the moment, there have been no indications that the public health emergency will lift soon.

However, some of the requirements are not tied to the public health emergency timeline and could come to an end soon.

States cannot add eligibility restrictions that did not exist before January 1, 2020 and may not increase premiums. They must cover coronavirus testing and treatment. And lastly, they have to provide continuous coverage for enrollees that were on Medicaid at the start of the public health emergency on March 13, 2020.

The maintenance of eligibility requirements are tied in part to the public health emergency declaration.

However, more specifically, they end either when the public health emergency ends or 90 days after the emergency was declared, depending on which comes first. The public health emergency has already been extended once, pushing the deadline from July 25 to October 23.

The new end date for the public health emergency is a month away from the publication of this issue brief. Still, HHS has not indicated whether it will extend the emergency declaration.

States must provide continuous enrollment through the end of the public health emergency’s expiration month. The other requirements expire at the end of the quarter in which the public health emergency ends.

Thus, unless HHS extends the public health emergency, states would receive enhanced federal funding through December 31, 2020 if they provide continuous enrollment through the end of October and meet the other four requirements until the end of December 2020.

Additionally, disaster-relief state plan amendments as well as verification process changes would end with the public health emergency on October 23, 2020.

“As such, states may consider whether to continue changes through regular SPA authority or revert to pre-pandemic policies,” KFF noted.

States generally have to use income to determine eligibility and provide an advance notice to beneficiaries ten days before their eligibility ends and give them 90 days’ notice to contest the decision in court.

With these specific timeline requirements, KFF emphasized that states will need clear deadlines in advance regarding when the maintenance of eligibility requirements will end in order to pivot.

States also need guidance regarding when they can continue delayed redeterminations, income data matches, how to measure income, and what notices they will need to send to beneficiaries when the public health emergency expires.

If CMS and HHS do not provide clearer guidelines around the end of the maintenance of eligibility requirements and the public health emergency itself, states and beneficiaries could experience various challenges in continuing healthcare coverage.

For example, states will have to deal with a backlog of redeterminations along with a surge in new enrollees. Already some states have exceeded their Medicaid enrollment expectations for the year due to the pandemic.

“In the absence of guidance from the Centers for Medicare and Medicaid Services (CMS), states are beginning to develop policies to address redeterminations and renewals based on the current PHE end date,” KFF added.

“CMS guidance could specify the requirements and procedures that states must follow when redeterminations and renewals restart after the PHE ends.”