November 7, 2022 |  By  Sarabeth Zemel, JD

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Statewide Case Studies on How to Prevent Coverage Losses

The COVID-19 pandemic brought a host of unimaginable losses. But with the declaration of a federal public health emergency (PHE), also came an increased reliance upon public health care systems like never before. National and state Medicaid programs experienced a surge of health care enrollment, with nearly 90 million individuals gaining coverage under the federal PHE declaration.

While the U.S. Department of Health and Human Services (HHS) recently renewed the PHE, health care systems and their members continue to prepare for the eventual end of the PHE declaration, which could happen as early as January 2023. However, the end of the PHE does not — and should not — signify the end of health coverage access. In this blog, which builds upon our August 2022 blog detailing the workforce challenges of the PHE “unwinding”, we highlight two states taking novel actions to try to mitigate administrative churn and minimize the health coverage disruptions that might come from the end of the PHE declaration.

Federal Landscape Overview

The U.S. HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) recently published a report projecting that 15 million people will lose their Medicaid coverage when the PHE ends. While more than half of those will no longer be eligible due to a change in income or other circumstances, ASPE estimates that more than six million individuals will lose coverage despite still being eligible for Medicaid.

Many individuals currently covered under the PHE could be susceptible to administrative “churning,” which is the loss of Medicaid coverage despite program eligibility. This can occur if Medicaid members have difficulty navigating the renewal process, state enrollment workers are unable to contact them due to a change of address, or other administrative hurdles. State workforce capacity also poses as a unique barrier when supporting enrollment, given that enrollment workers will be tasked with the large-scale redetermination of eligibility for individuals and families. You can read more about the challenges of “unwinding” the PHE in our previous blog.

Planning for the PHE Unwinding is Already Underway

The U.S. Centers for Medicare and Medicaid Services has been focused on helping states plan for the end of the PHE and mitigating administrative churn, and many states are planning to implement strategies with this in mind.

States are planning and preparing for the end of the PHE in many ways. In addition to shoring up an adequate workforce to meet the moment, states are also working with partners and Medicaid (or Medi-Cal in California) enrollees to ensure current and correct contact information is on file, implementing IT system changes, and making changes to renewal processes. Some states are also working on initiatives and policy solutions to minimize coverage disruptions when those who no longer qualify for Medicaid are disenrolled. We highlight two state initiatives below.

Case Study: Californiathe California state flag

California has worked to prevent coverage losses and expand coverage amongst populations for years. In 2019, the California Legislature passed a bill that was enacted into law which allowed California’s health insurance marketplace, Covered California, to automatically enroll consumers in a qualified health plan when they lose Medi-Cal coverage and become eligible for an advanced premium tax credit. Although the policy’s implementation was delayed due to the COVID-19 pandemic, Covered California plans to begin the auto-enrollment program once the federal PHE ends. The program will help ensure that those losing Medi-Cal coverage won’t experience a coverage gap. As long as an individual confirms selection into a qualified health plan and pays the premium within a month of disenrollment from Medi-Cal, they shouldn’t have a gap in coverage. In order to minimize cost-sharing and premium costs shouldered by individuals, Covered California will automatically place individuals into the lowest-cost, silver plan available.

California’s Medicaid agency, the Department of Health Care Services (DHCS), has also expanded Medicaid eligibility for patient populations at risk of losing coverage given the end of the federal PHE, with a specific focus on young adults. The policy builds upon legislation passed this year, which expands state-funded Medi-Cal benefits to individuals aged 26-49, regardless of immigration. With this expansion, due to take effect on Jan. 1, 2024, California will cover the last key population that remains uninsured, having implemented coverage expansions to young adults up to age 26 several years ago and to adults ages 50 and older earlier this year.

Federal guidance allows states 14 months to conduct Medicaid redetermination after the PHE ends, which could come as soon as January 2023. As a way to preserve Medi-Cal coverage for young adults who would lose their benefits under the PHE, California DHCS has issued policy guidance to instruct counties, which perform Medicaid eligibility determinations and renewals, to conduct young adults’ annual redetermination last. This guidance, coupled with the expanded eligibility mentioned above, will allow newly-turned 26-year-olds to remain in Medi-Cal until 2024, when the expansion goes into effect. California expects 40,000 young adults will benefit from this policy.

Case Study: Oregonthe Oregon state flag

Oregon has also been active in developing proactive policies that would mitigate any laps of coverage caused by the ending of the federal PHE. In 2022,  a law went into effect establishing a new task force aimed at creating a “bridge” plan. The plan would help bridge the potential lapse in coverage for individuals who become ineligible for Medicaid once the PHE ends and the state resumes redetermining eligibility.

After the task force worked to develop a bridge plan, Oregon announced it is seeking an 1115 waiver. The waiver proposes changes to Oregon’s Medicaid program Oregon Health Plan (OHP), overseen by Oregon’s Medicaid agency, Oregon Health Authority (OHA). The 1115 waiver will extend Medicaid coverage to individuals up to 200 percent of the federal poverty line (FPL) for 14 months after the end of the PHE — at which time the state aims to implement a Basic Health Program.

The Basic Health Program (BHP), a component of the Affordable Care Act (ACA), gives states the option of creating a health benefits program for individuals who are low-income and would be eligible for coverage through the ACA Marketplace. State-based coverage can be more affordable than the Marketplace, and these programs can improve continuity of care for those who could be susceptible to churning between difficult coverage programs. Currently, only two states — New York and Minnesota — have BHPs in place, but Oregon joins states Kentucky and West Virginia in working towards or expressing interest in creating a Basic Health Program.

The 1115 waiver proposal, seeks to mitigate the loss of coverage at the end of the PHE and until the BHP can be implemented. Under Oregon’s current eligibility guidelines, most adults with incomes above 138% of the FPL are ineligible for coverage under OHP. Individuals who are determined ineligible for Medicaid after the PHE due to higher incomes would be eligible for subsidized coverage through the Marketplace, but the transfer between Medicaid and the Marketplace is not seamless and often can result in people losing coverage.

Oregon is also attempting to minimize churn between Medicaid and the Marketplace for individuals with volatile income shifts throughout the year, similar to the policy rationale for eventually creating a BHP. The state is expected to submit its waiver proposal to CMS soon.

Looking Forward

While we know the national PHE will continue through January 11, its fate is uncertain after that date. In the meantime, state Medicaid agencies will continue to prepare for its end by continuing to staff up, working with community partners to get current contact information for enrollees, and doing what they can to ensure a smooth redetermination process later on. As the end of the federal PHE grows closer, we look forward to seeing other states, in addition to California and Oregon, announce new approaches to minimize coverage disruptions and mitigate lapses in health care coverage.

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