Continuous Coverage and the Unwinding of the Public Health Emergency

Andres De La Torre is a staff writer for Brief Policy Perspectives and a first-year MPP student.

The Public Health Emergency

In March 2020, the Secretary of the Department of Health and Human Services declared a Public Health Emergency (PHE) in response to the COVID-19 pandemic, giving the federal government the power to distribute federal grants for local support for the prevention and treatment of COVID-19. So far, $148 billion has been distributed in emergency grant funding, and the current PHE is set to expire on January 16, 2022, with a likely extension to April 2022. This coincided with the passing of the Families First Coronavirus Response Act of 2020, legislation that was aimed at addressing the COVID-19 pandemic through funding for a wide range of social programs, including Medicaid.

Some of the largest provisions in the Families First Coronavirus Response Act were the additional funding for the program alongside added protections for Medicaid beneficiaries. By temporarily increasing the federal medical assistance percentage (FMAP) by 6.2%, states were able to take advantage of this increase in funds to offset the cost associated with the large increases in Medicaid enrollment and efforts to combat the pandemic. In exchange for this increase in funds, states were not allowed to disenroll beneficiaries from the program, regardless of changes in income or other eligibility standards, known as continuous coverage. Since March 2020, the Medicaid program has seen a historical leap in enrollment; total enrollment grew to 82.8 million in May 2021, an increase of 11.5 million from enrollment in February 2020. The FMAP bump is tied to the PHE and is set to expire at the end of the same quarter that the PHE expires, which would most likely be in June 2022. Furthermore, the continuous coverage protections for beneficiaries would end immediately, allowing states to begin disenrolling beneficiaries as early as January 31, 2022. While millions have been offered a pathway to health coverage through these provisions, the end of the PHE is expected to bring about a wave of redetermination of eligibility amongst enrollees, which could result in millions being stripped of their health insurance. 

Continuous Coverage

Continuous coverage has allowed millions to remain covered under Medicaid as states have been unable to disenroll people from their program regardless of changes in eligibility. This has served to prevent gaps in health coverage amongst vulnerable populations when faced with income fluctuations and burdensome paperwork. Continuous coverage is not new: 25 states have adopted continuous eligibility for the Children’s Health Insurance Program recipients and states like New York and Montana have extended this to adults through Section 1115 demonstration waivers, appeals from states to ‘waive’ certain provisions and receive additional flexibility to design and improve their Medicaid program. States with continuous coverage have been able to keep more people on Medicaid and reduce ‘churn,’ a situation where beneficiaries that have been dropped from their coverage are renewed for coverage within months. 

Medicaid enrollees often experience changes that can lead to coverage disruption. The key change is income fluctuation, where a beneficiary’s income might rise above the Medicaid threshold, leaving them without coverage. Low-income people in particular are affected by this as income often fluctuates for weeks at a time. If beneficiaries don’t report a change in their income, they run the risk of losing coverage; furthermore, when state agencies do find out there has been income change, many beneficiaries are unable to follow up with the proper paperwork to keep their coverage. Increasing paperwork has been found to lead eligible people to reduce coverage due to difficulties with completing renewal processes and providing documentation.

Coverage gaps, as a result, can lead to higher health care costs, most notably, administrative costs for churn of enrollees cycling on and off Medicaid; a 2015 estimate found that the administrative cost of one person being disenrolled only to be re-enrolled could cost between $400 and $600. A higher uninsured population also puts more strain on the level of premiums and healthcare costs as hospitals are left to soak up the costs of uncompensated care.

Continuing Protections for the Medicaid population   

Continuous Coverage has been a lifeline for individuals and families to access health insurance amidst a global pandemic. Once the PHE ends, however, states will begin to redetermine eligibility and could disenroll millions. The Urban Institute measures that, best-case scenario, 15 million could lose health care coverage. The Biden Administration’s Build Back Better plan provides 12 months of continuous coverage for children under the Children’s Health Insurance Program, however, it is imperative that federal lawmakers consider extending these provisions to adults to prevent a widespread loss of insurance and continue support for those affected by the pandemic. By extending coverage for a year, the continuous coverage protections will provide families the stability they need to remain on their health insurance plans as the pandemic begins to unwind.

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