Health Law Scan

Legal Insights and Perspectives for the Healthcare Industry

Medicaid enrollment grew significantly during the public health emergency (PHE). States implemented expanded eligibility and enrollment as well as reduced cost sharing and premiums based on Medicaid program regulatory flexibilities available during the PHE, but many of those will expire on May 11, 2023 and December 11, 2023.

The most significant changes to the program relate to the Medicaid Continuous Enrollment Condition, Section 1115 and 1915(c) waivers, and vaccine/testing coverage.

Medicaid Continuous Enrollment Condition

The Medicaid program is jointly funded by the states and the federal government. The portion reimbursed by the federal government is called the Federal Medical Assistance Percentage (FMAP) and is specific to each state, but no less than 50% of the Medicaid program is reimbursed by the federal government.

The Families First Coronavirus Response Act (FFCRA), enacted on March 18, 2020, offered states enhanced federal funding (an additional 6.2% FMAP) in exchange for continuously enrolling beneficiaries throughout the PHE. In other words, the states could not disenroll individuals for failure to meet eligibility requirements during the PHE.

The Consolidated Appropriations Act of 2023 (CAA), enacted on December 29, 2022, delinked the Medicaid Continuous Enrollment Condition from the PHE and set an end date of March 31, 2023. States have a 12-month period, referred to as the “unwinding,” that started on April 1, to resume eligibility screenings and terminate ineligible individuals.

The Department of Health and Human Services (HHS) estimates that 15 million people will lose Medicaid coverage, including 6.8 million individuals who may remain eligible for Medicaid benefits. This is largely because notices must be sent to individuals to verify eligibility and Medicaid agencies lack updated contact information. Those individuals who do not respond to these verification notices within required timeframes will be automatically disenrolled.

Additionally, individuals with limited English proficiency, those with disabilities, and those who have moved may be particularly at risk of losing coverage despite eligibility.

States are required to develop operational plans and work with the Centers for Medicare and Medicaid Services (CMS) to prioritize renewals and meet other requirements to continue to receive enhanced federal funding during the unwinding period. However, the unwinding presents problems for state Medicaid agencies that are struggling with staffing inadequacies, which may result in states seeking an extension of the unwinding period.

Medicaid Waivers

States implement their respective Medicaid programs through a Medicaid state plan, state plan amendments, and various waivers. Subject to certain federal minimums, these foundational documents set out what types of services are covered by the state Medicaid program, what individuals are eligible for Medicaid coverage, and enrollee premiums and cost sharing. Waivers allow states to deviate from the federal requirements under the Social Security Act. For example, states that want to offer managed care in certain geographic areas must waive the federal requirement for “statewideness” under Section 1902(a)(1).

During the PHE, many states sought disaster-relief state plan amendments, 1115 waivers, and 1915(c) waivers to allow flexibilities related to benefits, eligibility, enrollment, and other Medicaid requirements.

  • Disaster-relief state plan amendments allowed for a streamlined template-based process to seek temporary changes to state Medicaid programs. These waivers and the flexibilities they allow expire at the end of the PHE, unless otherwise specified by the state.
  • 1115 Demonstration Projects allow states to seek waiver authority under Section 1115(a) of the Social Security Act to implement experimental, pilot, or demonstration Medicaid projects. During the PHE, CMS approved various changes to the Special Terms and Conditions (which set out the terms of the state’s 1115 Demonstration Project) to allow for certain flexibilities relative to Demonstration Projects, but many approvals were tied to the PHE and will expire with the expiration of the PHE on May 11, 2023.
  • Home and community-based services (HCBS) waivers allow certain covered individuals (e.g., people with intellectual disabilities) to receive certain services in non-institutional settings, such as the individual’s home or community. Standardized Section 1915(c) HCBS waiver were implemented under an “Appendix K” template to streamline requests for flexibilities. These waivers will expire six months after the end of the PHE, or on December 11, 2023.

As these waivers expire there will likely be significant impact on beneficiaries and providers. In particular, many HCBS waivers allowed family caregivers to be paid for providing services to covered individuals in a home-based setting. Some states have committed to allow these programs to exist beyond the PHE, but others will allow their waivers to expire, which may pose workforce challenges that need to be addressed.

Vaccine and Testing Medicaid Coverage

Medicaid will continue to cover vaccines and treatment for COVID-19 without beneficiary cost sharing. Medicaid programs must also provide COVID-19 testing without cost sharing until September 30, 2024, after which states may vary coverage and cost sharing for testing.

Note that Medicaid telehealth flexibilities were available prior to the PHE through state plan amendments and other mechanisms. These mechanisms will continue to be available. We previously discussed in a Health Law Scan blog post the impact of the end of the PHE on telehealth.