For an individual to maintain Medicaid coverage, programs must redetermine eligibility at least annually1 and whenever changes in circumstances (e.g., overtime pay, divorce, marriage) are reported or identified by data matches — for example, via state-reported wage records. More than 10 percent of Medicaid beneficiaries experience “churn”— that is, transitions on and off coverage over the course of the year — because of periodic redeterminations and midcycle changes in eligibility. Terminations of coverage are expected when someone is no longer eligible, but terminations can occur even as the result of short-term changes (e.g., overtime or seasonal pay) or when the beneficiary remains eligible but has not completed required paperwork; for example, because forms were mailed to an old address or because of language barriers or challenges securing proof of earnings. People losing coverage for these so-called procedural reasons may eventually regain coverage, but often experience a gap in care.
Policies that promote continuous coverage in Medicaid, and that reduce churn, are gaining momentum and for good reason. Studies show that stable coverage can improve care by:
- promoting preventive care, including important physical and mental health screenings
- ensuring ongoing care, treatment, and care management for people with chronic illnesses, disabilities, or acute care needs
- potentially lowering the cost of care over time, along with administrative costs associated with people churning on and off coverage
- permitting better reporting on the quality of care provided
- offering financial protection to the people receiving care who otherwise might be faced with a bill they cannot afford to pay and to health providers delivering care.
Most sources of insurance have processes that promote stable coverage. People with employer-based insurance have annual open-enrollment periods that allow for changes to coverage, with coverage maintained if individuals take no action. Similarly, coverage renews annually for people with Affordable Care Act (ACA) marketplace plans or Medicare. Medicaid, however, has not offered these same protections, even though beneficiaries are unlikely to be able to afford care if coverage lapses.
Policies Promoting the Continuity of Coverage and Care
The passage of the ACA in 2010 introduced broad reforms to the Medicaid redetermination process, aimed primarily at reducing procedural terminations. Under the revised policies, periodic redeterminations for children, pregnant women, and nonelderly adults without disabilities were limited to once per year. States maintained the ability to redetermine eligibility in between periodic reviews if notified of changes in circumstances. States also were directed to rethink the paper-driven redetermination process that placed the burden on beneficiaries and instead shift to an electronic process that relies on available sources of data. These changes have achieved notable reductions in churn, although states’ use of electronic data varies.
More recently, with the declaration of the COVID-19 public health emergency (PHE), Congress offered states enhanced federal Medicaid payments during the PHE, conditioned on states maintaining coverage for people who were enrolled when the PHE began or who enrolled during the PHE. Medicaid eligibility redeterminations stopped during the PHE and, largely as a result, insured rates are holding steady during the pandemic.
Other federal policies have helped to promote stable coverage in Medicaid, including the 12-month continuous coverage option for children enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). The policy prevents coverage disruptions resulting from changes in income or family circumstances between annual redeterminations.
Additionally, federal law has long required states to continuously cover pregnant people until 60 days postpartum. In light of sharp increases in maternal mortality, particularly among Black women, the American Rescue Plan Act (ARPA) created a time-limited option (April 1, 2022–March 31, 2027) for states to extend continuous coverage to 12 months postpartum.
While the PHE-related continuous coverage requirement kept Medicaid coverage intact during the health emergency, when it ends, nearly all 84 million people enrolled in the program will need to have their eligibility redetermined.2 Given the extent to which individuals have moved during the PHE, including families doubling up or losing housing altogether, and the variations in states’ capacity to rely on electronic data sources, the risk of procedural terminations is great. Strong policies, practices, and oversight will be essential to avoid massive coverage losses. States and the Centers for Medicare and Medicaid Services (CMS) will need to ensure that ACA renewal rules and beneficiary protections are followed consistently. States, health plans, providers, and consumer groups will all have a role to play in alerting people to update their addresses and providing support for those who are experiencing homelessness or have language barriers or special health needs. The challenges are great, particularly in light of state agency staff shortages.
At the same time, policymakers are looking to make further advances in continuous coverage. If enacted into law, policies included in the House version of the Build Back Better Act (BBBA) would provide a huge boost. Two key provisions are aimed at stabilizing coverage and reducing churn for children and postpartum women:
- Continuous coverage for children. Within one year of enactment, all states would be required to provide 12 months of continuous coverage to children enrolled in Medicaid or CHIP.
- Continuous postpartum coverage. The BBBA addresses maternal morbidity and mortality by building on the ARPA option and requiring all states to provide 12 months of postpartum coverage.
Some states have already set their sights on additional reforms, having seen the value of coverage stability during the COVID-19 PHE. Recognizing the particular benefits of ongoing coverage and care for young children, both Washington and Oregon are seeking waivers to continuously cover young children in Medicaid until they turn 6. Kansas and Oregon are seeking federal authority to provide continuous coverage for certain adults. Waivers are needed because states do not have the option to offer continuous coverage to adults outside pregnancy and the postpartum period.
Given the Biden administration’s attention to coverage and equity, CMS has identified careful unwinding of continuous coverage as one of its highest Medicaid priorities. It also seems reasonable to expect CMS will be open to the new waiver requests by states for continuous coverage waivers. While state action and experimentation are valuable, federal law changes would be needed to ensure that continuous coverage is available across populations and the nation. The BBBA continuous coverage provisions would be a big step forward on access to coverage, care, and equity.