As part of the government’s efforts to protect people from COVID-19, Medicaid redetermination has been prohibited for more than three years. This has meant state Medicaid programs have been unable to disenroll individuals with Medicaid coverage since the onset of the public health emergency in March 2020.
However, the federal government is now striving to move on from the pandemic with legislation that brings the healthcare industry closer to pre-pandemic normalcy. One such move is the expiration of the COVID-19 public health emergency on May 11. Another is the reinstated permission for state Medicaid programs to redetermine the eligibility of individuals with Medicaid coverage.
What Is Medicaid Redetermination?
Also known as eligibility redetermination, renewal, case review, and recertification, Medicaid redetermination is the process state agencies use to ensure that Medicaid beneficiaries continue to be eligible for Medicaid coverage.
To be eligible for Medicaid, individuals must have a fairly low income, and some populations are subject to asset tests. It is because of the variable nature of these requirements that periodic redeterminations are necessary to ensure that all enrollees remain eligible.
Why Was Medicaid Redetermination Prohibited?
At the start of the pandemic, government legislature was focused on the protection of individuals' access to healthcare during the unprecedented COVID-19 pandemic. Congress enacted the Families First Coronavirus Response ACT (FFCRA), which included the Medicaid continuous enrollment provision.
The Act required that Medicaid programs kept people continuously enrolled through the end of the month in which the public health emergency expired and prevented them from issuing new Medicaid eligibility restrictions. In exchange, those programs would receive enhanced federal funding1.
What Impact Did the FFCRA Have?
Primarily, the FFCRA's requirements prevented many individuals whose eligibility would otherwise have expired from losing coverage. However, it also contributed to a significant increase in Medicaid enrollment. From February 2020 to October 2022, enrollment rose by 28.5%, representing 20.2 million more Medicaid enrollees2.
In addition, FFCRA played a part in a considerable reduction in the number of people in the U.S. without health insurance. From 2019 to 2021, the uninsured rate for people under the age of 65 dropped from 11% to 10.5%. In the first quarter of 2022, the rate even dropped to an all-time low of 8%, before rising slightly to 8.6% in the second quarter3.
When Will Medicaid Redeterminations Restart?
State Medicaid agencies will be permitted to restart redeterminations as of April 1, 2023.
Although FFCRA required that Medicaid disenrollment was prohibited until the end of the month in which the public health emergency expired — which we now know would be May 31 — this changed in December when the Consolidated Appropriations Act, 2023, was signed into law.
The Consolidated Appropriations Act, 2023, set an end date of March 31, 2023, for the continuous enrollment provision, meaning state Medicaid agencies can resume disenrollment at the start of April. The Act also phases down the enhanced federal funding through December 20232.
What Impact Will Medicaid Redeterminations Have?
Due to variations by state, and the inability of many state Medicaid agencies to provide reports, estimates to the number of individuals who currently receive Medicaid services but will lose coverage vary significantly.
Based on the estimated average disenrollment rate, however, it is predicted that between 15 and 18 million people may lose Medicaid coverage over the coming year4.
For the state agencies themselves, the redeterminations will have a considerable impact on their capacity and their finances.
43 states are planning to take between 12 and 14 months to complete renewals in an effort to prevent inappropriate terminations. This will also spread the workload and make it more manageable. For other states, reducing their budgetary costs is a priority, and they'll therefore be aiming to conduct redeterminations much quicker5.
What Are the Alternatives for Individuals Who Are Disenrolled?
For those who are no longer eligible and lose their Medicaid benefits as a result of 2023's redeterminations, there are a few options. Potential alternatives include6:
- Low-Cost Insurance
- Affordable Care Act (Obamacare) Plans
- Affordable Care Act Insurance Premium Subsidies
- Short-Term Health Plans
- Health Insurance through an Employer
- Medicaid Reapplication
Many, however, find that they are unable to access an alternative insurance plan and are forced to proceed without insurance. In this scenario, utilizing the services of community health centers is a great option to access quality, affordable care.