Introduction and summary
In January 2020, the federal government enacted a national public health emergency that has since served as the “primary legal pillar of the U.S. pandemic response.”1 The emergency declaration, in effect until mid-April 2022, provides the federal government the authority to support key COVID-19 interventions, including regulatory flexibilities and increased funding that has expanded patients’ access to both telehealth and the Food and Drug Administration’s guaranteed no-cost coverage for COVID-19 testing and treatment.2 In addition, the Families First Coronavirus Response Act (FFCRA) tied several provisions to the public health emergency timeline. The FFCRA, which Congress passed in 2020, prohibits state Medicaid agencies from disenrolling beneficiaries until the end of the month in which the public health emergency expires, as well as bars private insurers from imposing cost-sharing or prior authorization requirements on COVID-19 testing for the duration of the public health emergency.3 These protections have averted coverage interruption for millions of Americans during the pandemic and helped ensure access to free testing, treatment, and vaccines.
With state and local governments relaxing their public health measures, and the Biden administration releasing a national plan for a path out of the pandemic,4 it is unclear how many more times the U.S. Department of Health and Human Services (HHS) will renew the public health emergency.5 Therefore, federal and states officials are exploring measures to mitigate the impact of unwinding the related provisions, especially those regarding the resumption of Medicaid eligibility redeterminations. The Urban Institute estimates that 14.4 million Medicaid enrollees could be deemed ineligible for Medicaid and lose coverage in the 14 months following the end of the public health emergency—if it concludes in the second quarter of 2022 and states take no action to connect former enrollees to new coverage.6 It is imperative that states prioritize coverage retention for eligible enrollees, protect enrollees against inappropriate termination, and prepare to transition ineligible enrollees into alternate, affordable, and quality coverage, such as that offered through the Affordable Care Act (ACA) marketplaces.
14.4M
Number of Medicaid enrollees who could lose coverage when the public health emergency ends
This report includes strategies for states to consider as they develop their operational plans in anticipation of the public health emergency unwinding. It also provides recommendations for how federal policymakers can prevent coverage disruption and maintain care. If federal and state governments do not take action, many people, particularly those who are uninsured or underinsured, could lose access to care.7 And even after the public health emergency ends, the United States needs to maintain its COVID-19 readiness by providing all residents no-cost access to vaccinations, boosters, and testing.
If federal and state governments do not take action, many people, particularly those who are uninsured or underinsured, could lose access to care.
Health coverage and COVID-19-related services linked to the public health emergency
HHS first declared a national public health emergency in response to the COVID-19 pandemic on January 31, 2020.8 The public health emergency authorizes the secretary of HHS to take discretionary action during the emergency period, including grant-making, modifying the practice of telemedicine, and temporarily amending or waiving regulatory requirements.9 To date, HHS has extended the public health emergency eight times for 90 days each; the current expiration date is April 15, 2022. 10 HHS is widely expected to renew the public health emergency one final time, extending it through July 2022.11
Given the numerous provisions tied to and associated with the public health emergency, including enhancements to federal funding for Medicaid coverage and cost-sharing waivers for COVID-19 testing and treatment, President Joe Biden has assured states that they will have at least 60 days’ notice ahead of expiration.12 Yet states will face significant operational and administrative burdens when the public health emergency ends.
Millions of Medicaid enrollees could lose coverage post-public health emergency
In March 2020, Congress passed the FFCRA. Among other things, the law temporarily increased the federal government’s share of Medicaid payments, also known as the federal medical assistance percentage (FMAP), by 6.2 percentage points for states that agreed to both maintain continuous coverage for Medicaid beneficiaries and not impose eligibility limits or new administrative enrollment barriers for the duration of the public health emergency.13 All 50 states and Washington, D.C., elected to receive the FMAP enhancement and have maintained Medicaid coverage for individuals who may have become ineligible since their last eligibility determination, which has contributed to unprecedented growth in Medicaid enrollment. From February 2020 to September 2021, there was an increase of 13.6 million enrollees in Medicaid and the Children’s Health Insurance Program (CHIP) combined.14 Similar increases occurred in each of the 50 states and Washington, D.C., ranging from a nearly 12 percent increase in Washington, D.C., to a 42 percent increase in Oklahoma.15
Upon the conclusion of the public health emergency, states will resume standard Medicaid eligibility and enrollment operations—including applications, renewals, redeterminations, and verifications—for the first time in more than two years. With significant backlogs expected, the Centers for Medicare and Medicaid Services (CMS) has given states a post-public health emergency timeline for when they must resume routine operations: States have up to 12 months to initiate renewals, 14 months to complete renewals, and four months to begin processing new applications.16 However, the enhanced federal funds for Medicaid benefits sent to states under the public health emergency terminate at the end of the quarter in which the public health emergency expires, which means states will be under fiscal pressure to complete redetermination reviews swiftly.17 If states rush the redetermination and eligibility processes, they may trigger inappropriate terminations and coverage losses.
In 2018, 1.5 million low-income individuals lost Medicaid coverage due to state enrollment policies that required the use of phone or mail for eligibility renewals.
Historically, redeterminations have contributed to coverage losses, primarily due to paperwork barriers.18 In 2018, 1.5 million low-income individuals lost Medicaid coverage due to state enrollment policies that required the use of phone or mail for eligibility renewals.19 Due to changes in enrollees’ financial circumstances and location during the pandemic, redeterminations that occur after the end of the public health emergency are likely to result in such unintended coverage loss, according to The Commonwealth Fund.20 As stated above, the Urban Institute estimates that 14.4 million people could lose their Medicaid coverage in the 14 months after the end of the public health emergency if it expires after the second quarter of 2022.21
Massive disenrollment could strain hospitals, lead people to forgo necessary care and screenings, and leave millions without access to health care. Coverage losses and disruptions not only impede health care access but also lead to poorer health outcomes and increased financial burden.22 Disruptions lead to greater emergency department use and fewer health screenings as well as reduce people’s and providers’ ability to manage chronic conditions.23 Coverage, meanwhile, is associated with better health;24 financial benefits and reduced debt for low-income families;25 and improved sustainability of rural hospitals.26
Because many of the policy changes tied to the public health emergency were aimed at improving coverage, affordability, and access to care for Medicaid beneficiaries, the uninsured, and undocumented people, the consequences of the public health emergency unwinding will disproportionately affect low-income, Black or African American, and Hispanic or Latino individuals—populations that have also experienced higher likelihoods of death and hospitalization from COVID-19.27 In the United States, Black and Hispanic people are more than twice as likely to be enrolled in Medicaid than non-Hispanic white people.28 Black and Hispanic individuals are also 1.5 times and 3 times more likely, respectively, to be uninsured than non-Hispanic white people.29
In the United States, Black and Hispanic people are more than twice as likely to be enrolled in Medicaid than non-Hispanic white people.
Access to COVID-19 testing and treatment must be preserved post-public health emergency
The end of the public health emergency may greatly reduce access to COVID-19 testing, treatment, and diagnostics. The public health emergency has enabled the federal government to support more than one year of vaccine administration and to significantly improve the availability of COVID-19 tests; without it, consumers could suddenly face cost sharing for COVID-19 testing. The FFCRA and Coronavirus Aid, Relief, and Economic Security (CARES) Act require state Medicaid programs to cover COVID-19 testing, vaccination, and treatment with no cost sharing through the last day of the first quarter after the end of the public health emergency.30 The American Rescue Plan Act (ARP) provided states funding for COVID-19 testing and diagnostics for uninsured residents, regardless of income, and emergency care for low-income undocumented individuals for the duration of the public health emergency, with 100 percent federal funding covering the latter group.31 The FFCRA requires most private health insurance plans to cover COVID-19 testing with no cost sharing or prior authorization for the duration of the public health emergency, as well as to reimburse up to eight over-the-counter COVID-19 tests per enrollee per month and cover COVID-19 vaccinations with no cost sharing.32
The post-public health emergency rollback of free COVID-19 testing, treatment, and vaccinations, as well as emergency COVID-19 care, threatens both individual and public health, particularly for low-income and undocumented communities. No-cost access to COVID-19 risk mitigation measures such as rapid tests, vaccination, and treatment makes it more likely that Americans will adhere to public health recommendations.33 The Biden administration recently requested additional resources from Congress to sustain the national COVID-19 response, including $22.5 billion in immediate emergency funding to maintain domestic testing capacity and secure additional boosters, monoclonal antibody treatments, and antivirals.34 As federal funding runs out, the uninsured will need to pay out of pocket for testing and treatment. Beginning March 22, 2022, the COVID-19 Uninsured Program stopped accepting claims for testing and treatment due to a lack of sufficient funds, and as of April 5, 2022, the program has also stopped accepting vaccination claims.35 Testing manufacturers have set their prices, and uninsured individuals will be charged upward of $100 for COVID-19 tests.36 Congress must act to ensure these critical services are accessible to all U.S. residents, especially as COVID-19 surges will likely arise in the future.
The post-public health emergency rollback of free COVID-19 testing, treatment, and vaccinations, as well as emergency COVID-19 care, threatens both individual and public health.
Strategies to support continuity of care and coverage retention
As state Medicaid officials and other policymakers plan for the conclusion of the public health emergency, they can employ multiple strategies to limit coverage disruptions. Federal officials should continue to support states in their efforts to preserve coverage and care post-public health emergency.
Implement Medicaid adult continuous enrollment
Income fluctuation is one of the primary drivers of Medicaid ineligibility and subsequent coverage disruptions.37 For example, when an adult’s family income rises above 138 percent of the federal poverty level (FPL), even for a short period of time, they can become ineligible for Medicaid. Income instability and fluctuations have become more common during the COVID-19 pandemic, as businesses and workplaces closed, reopened, and closed again, meaning that many current Medicaid enrollees will face disenrollment due to income change upon redetermination post-public health emergency.38
Under continuous eligibility, individuals are guaranteed Medicaid coverage for 12 months after their eligibility determination regardless of changes in income.
To proactively address potential lapses in Medicaid coverage due to income fluctuations, states should consider submitting a Section 1115 demonstration waiver to the CMS to implement a 12-month continuous eligibility policy for adult Medicaid enrollees. Under continuous eligibility, individuals are guaranteed Medicaid coverage for 12 months after their eligibility determination regardless of changes in income.39 Currently, 34 states provide 12-month continuous eligibility to children enrolled in Medicaid or CHIP, but New York and Montana are the only states that have implemented continuous eligibility for adults.40 New York has used a Section 1115 waiver to offer continuous coverage for adult Medicaid enrollees since January 2014.41 Eligible adult enrollees in the state—pregnant women, individuals aged 19–20, childless adults, individuals who are younger than 65, and parents or caregiver relatives—are guaranteed Medicaid coverage regardless of changes in income for 12 months after they initially enroll.42 A RAND Corp. evaluation of New York’s demonstration found that the continuous eligibility policy increased Medicaid coverage duration by 8.2 percent from 2014 to 2018.43 In addition to improving coverage duration, this approach would reduce the state’s administrative burden, since only one review and determination of cases would be required during the 14-month period following the end of the public health emergency, with no redeterminations based on change in circumstances until the next renewal interval.
Streamline Medicaid eligibility to provide administrative relief
The Urban Institute estimates that states will process 77.3 million Medicaid eligibility applications if the public health emergency expires after the second quarter of 2022.44 States can reduce their administrative burden by streamlining eligibility, and the public health emergency unwinding presents an opportunity for them to boost coverage by establishing permanent connections between coverage and the social safety net. To date, 13 states have submitted a state plan amendment to the CMS for express lane eligibility (ELE), which would allow them to use eligibility findings from other public programs, including the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to verify Medicaid and CHIP eligibility.45 Since 2012, Massachusetts has used ELE for families enrolled in the state Medicaid and CHIP programs as well as in SNAP. In the first year of ELE implementation, 34 percent of adult enrollees no longer needed to complete the renewal process because their Medicaid eligibility was determined using SNAP data.46 A 2013 Mathematica evaluation of eight states—Alabama, Louisiana, Massachusetts, South Carolina, Maryland, Iowa, New Jersey, and Oregon—found that ELE adoption increased children’s enrollment in Medicaid by about 6 percent from 2011 to 2013.47 March 2022 guidance from the CMS encourages states to leverage waiver authority granted by Section 1902(e)(14)(A) of the ACA to renew Medicaid eligibility based on an individual’s eligibility for SNAP.48
The Urban Institute estimates that states will process 77.3 million Medicaid eligibility applications if the public health emergency expires after the second quarter of 2022.
Maximize federal support for Medicaid through waivers
States should pursue strategies that promote continuity of coverage and maximize federal support for Medicaid. This approach increases political feasibility, reduces state financial burden, and fully leverages the federal funding and regulatory flexibilities offered by the CMS and HHS. In the CMS’ March 2022 guidance to state health officials, the agency encouraged states to seek approval for Section 1902(e)(14) waivers, which allow states facing operational issues to establish income and eligibility systems to protect Medicaid beneficiaries’ access to coverage while easing administrative burdens.49 During the unwinding of the public health emergency, an approved waiver would provide additional flexibility for states to process renewals, including partnering with managed care plans to update beneficiary contact information and extending the time frame to take final administrative action on hearing requests, such as for benefit reinstatement.50 To ensure states are authorized to engage in flexibility around renewal processing and streamlining, as granted by Section 1902 (e)(14), the CMS should review and approve state waivers within 60 to 90 days. In March 2022, the Oregon Legislature passed H.B. 4035, which authorized its state-based marketplace, the Oregon Health Authority (OHA), to seek federal approval for a subsidized “bridge plan” designed to provide continuity of care for low-income residents who regularly enroll and disenroll in Medicaid due to fluctuations in income.51 Upon approval of a Section 1332 state innovation waiver, the OHA will establish and auto-enroll adults with family incomes from 128 percent to 200 percent of the FPL into a bridge plan beginning in 2023.52 The approval will also authorize the state, via a Section 1115 waiver, to temporarily expand Medicaid eligibility for individuals with incomes up to 200 percent of the FPL, maintaining coverage through the redetermination period and prior to the launch of the bridge plan.53
Utilize budget surpluses to preserve coverage
States with budget surpluses after receiving federal recovery funding have an opportunity to invest in the health of their residents and direct resources to support state-funded continuous coverage. In December 2021, the Massachusetts Legislature allocated $5 million of ARP funds to Health Care For All, a nonprofit state community organization that regularly engages marginalized communities.54 Health Care For All will conduct a multifaceted public awareness and outreach campaign to the state’s 2.1 million Medicaid enrollees, educating them on the public health emergency unwinding and their health insurance coverage options.
Leverage ACA marketplaces for enrollment transitions and consumer education
Many enrollees losing Medicaid coverage will be eligible for other subsidized coverage, including plans offered through the ACA marketplaces; therefore, active collaboration and coordination between Medicaid agencies and the state and federal marketplaces will be essential to successfully transition enrollment and reduce coverage losses. The Urban Institute estimates that one-third of adult Medicaid enrollees disenrolled after the end of the public health emergency will be eligible for subsidized marketplace coverage.55 To facilitate a smooth transition from Medicaid to marketplace coverage, states should prepare their Medicaid systems now to securely transfer enrollee data and information to the marketplace.
Active collaboration and coordination between Medicaid agencies and the state and federal marketplaces will be essential to successfully transition enrollment and reduce coverage losses.
The 18 states with state-based exchanges, as well as the states with integrated eligibility systems for marketplace and Medicaid coverage—including Colorado, New York, and Massachusetts—have the benefit of existing infrastructure to facilitate Medicaid and marketplace data sharing.56 The state and federal marketplaces should review and update their communication and member materials ahead of the end of the public health emergency to ensure they can assist new consumers in understanding the elements of their marketplace coverage, as some Medicaid enrollees may be unfamiliar with paying monthly premiums, out-of-pocket expenses, and annual deductibles for medical services and prescription drugs.57
Provide 120-day notice of the end of the public health emergency
While the CMS has granted state Medicaid agencies up to 14 months after the end of the public health emergency to conduct and complete eligibility redeterminations, the agencies have requested notice of the public health emergency’s expiration. The National Association of Medicaid Directors, together with health plan associations, have asked congressional leaders to request that the Biden administration provide 120 days’ notice of the end of the public health emergency.58
This additional notice would help states and payers prepare for the onset of Medicaid redeterminations and disenrollments. States could conduct outreach about upcoming changes, subsidized marketplace options, and the redetermination process to give Medicaid beneficiaries more time to prepare for potential coverage loss. Congress and the administration should act to provide sufficient lead time so states can avoid unnecessary coverage losses and disruptions.
Provide guidance and guardrails around marketing and consumer education
When disenrollments begin, it will be important to ensure Medicaid managed care plans and other insurers can reach potential consumers with information about alternative coverage opportunities, while also safeguarding against marketing practices that could push enrollees into inadequate coverage. When people lose their Medicaid coverage, insurers can conduct outreach encouraging them to enroll in a marketplace plan. Federal guidance and outreach directing consumers to no- or low-cost coverage on the ACA marketplaces is crucial for minimizing loss of coverage. During the pandemic, however, there were reports of consumers unwittingly steered to alternative, often subpar plans when searching for coverage during the pandemic. Federal and state governments must put guardrails in place to direct consumers to valid sources of information.59
The CMS should issue guidance directing state Medicaid agencies to begin the process of contacting beneficiaries about redeterminations prior to the end of the public health emergency.
Specifically, the CMS should issue guidance directing state Medicaid agencies to begin the process of contacting beneficiaries about redeterminations prior to the end of the public health emergency. Many Medicaid applications collect only mailing addresses, not email addresses or phone numbers.60 Because renters, especially renters of color, experienced substantial housing instability during the COVID-19 pandemic, notices of coverage losses may not reach the affected parties.61 People with a qualifying life event, such as health coverage loss, have 60 days before or following the event to enroll in a marketplace plan, but Medicaid beneficiaries whose address has changed since enrolling in Medicaid may not receive coverage loss notifications and could miss the 60-day special enrollment period.62 State marketplaces and the Biden administration should establish a special enrollment period during the redetermination period to allow former Medicaid beneficiaries more time to enroll in a new plan.
Extend the marketplace subsidy enhancement
If the public health emergency ends before the end of 2022, many Medicaid beneficiaries determined to be ineligible for Medicaid coverage will be able to access no- or low-cost coverage through the ACA marketplaces. The ARP expanded subsidies for individuals purchasing individual marketplace plans through the end of 2022.63 The ARP made zero-dollar premium plans available to people with family incomes below 150 percent of the FPL and increased the generosity of premium tax credits for people with incomes between 150 percent and 400 percent of the FPL. The ARP also made financial assistance newly available to people with family incomes above 400 percent of the FPL by capping premiums at 8.5 percent of income.
To avoid major coverage losses and ease the transition at the end of the public health emergency, Congress must extend ARP subsidies, as proposed in the budget reconciliation package.64 Without federal action to extend the ARP subsidies, marketplace plans will be less affordable, and Medicaid coverage losses resulting from the end of the public health emergency would be compounded by marketplace coverage losses from the end of the ARP subsidies. While pre-ARP marketplace subsidies will remain, premiums are likely to rise significantly, leading beneficiaries to no longer be able to afford coverage.65 For example, a 60-year-old making $51,000 per year would see their premium increase 165 percent without the ARP.66 The average 2022 monthly premium for Healthcare.gov enrollees was $111; if consumers had not received the additional premium subsidies, the monthly premium would have been $170, or 53 percent higher.67 If marketplace subsidies expire, the Congressional Budget Office predicts that enrollment levels will decline to pre-ARP baseline levels by 2024.68
Close the Medicaid coverage gap
Another way Congress can reduce the impact of Medicaid disenrollment after the end of the public health emergency is to close the Medicaid coverage gap. More than 2.2 million Americans are currently in the Medicaid coverage gap, meaning they live in states where they do not qualify for Medicaid coverage but have incomes too low to be eligible for marketplace subsidies, which begin at 100 percent of the FPL.69 If affordable coverage were available to all low-income adults in the 12 states that have not yet expanded Medicaid under the ACA, some people facing uninsurance after the public health emergency would have an option for coverage.
2.2M
Number of Americans currently in the Medicaid coverage gap
States that have not yet expanded Medicaid should take advantage of federal funding and further ARP financial incentives to do so.70 Providing Medicaid coverage to those in the gap would save 7,000 lives annually, cut medical debt by $2 billion, and reduce evictions by 55,000 annually, according to estimates by the Center for American Progress.71 In the meantime, Congress should act promptly to offer no- or low-cost coverage to those in the Medicaid coverage gap, as proposed in the budget reconciliation package.72 Closing the Medicaid coverage gap would also help reduce disparities in health coverage: Roughly 60 percent of those in the Medicaid coverage gap are people of color.73
Conclusion
The end of the federal public health emergency does not have to mark the end of expanded access to health coverage and care. State and federal officials can implement a range of policies and strategies to prevent Medicaid coverage losses and preserve access to COVID-19 testing, treatment, and vaccines.