Emergency Medicaid coverage set for phase out starting April 1

State Medicaid officials received long-awaited direction from Congress on Tuesday, with an apparent agreement that would phase out some COVID-related emergency measures on April 1 and untie them from the hazy timeline for the Biden administration to declare the pandemic over.

The deal, tucked into the end-of-year spending package likely to be approved before lawmakers leave the U.S. Capitol for the holidays, would end months of uncertainty over when states would be required to cut off insurance to people who were automatically re-enrolled in Medicaid throughout the pandemic regardless of whether they still qualified.

“What is in the omnibus draft is directly responsive to the concerns articulated by our members,” Jack Rollins, director of federal policy for the National Association of Medicaid Directors, said in a statement to Pluribus News.

The agreement would set new terms for a provision in the first COVID relief package passed by Congress in March 2020. It prevented states from removing recipients from Medicaid rolls and provided extra federal money until the end of the federal COVID public health emergency, which has been extended 11 times and is expected to remain in place at least until April.

The omnibus bill would allow states to start removing ineligible people from their Medicaid rolls on April 1, but it would give state Medicaid officials a year to complete the transition, phasing out the 6.2% increase in the federal share of certain Medicaid spending provided during the COVID emergency rather than cutting it off all at once.

It would put the savings toward a new requirement that children now enrolled in the program would remain covered for a year after their circumstances change, and to help pay for a provision in the 2021 American Rescue Plan that made it easier for states to extend postpartum Medicaid coverage from 60 days to one year, which would become permanent.

The continuous enrollment requirement allowed 20 million people to gain Medicaid coverage during the pandemic. But advocates from both sides of the political spectrum have urged the federal government to provide more clarity about the process of returning to normal.

Progressive groups and advocates for the underinsured have argued that the lack of a clear deadline increased opportunities for state officials to lose track of enrollees, potentially putting millions of people — mostly poor women and children — at risk of losing insurance coverage if they aren’t aware that they need to re-enroll themselves or find other options.

“Congress has taken critical steps to secure health care for mothers and children, capping off Democrats’ remarkable year of lowering costs and expanding coverage to millions of Americans,” Leslie Dach, chair of the left-leaning advocacy group Protect Our Care said in a statement.

Conservatives want the requirement to end as soon as possible, arguing that it has artificially swollen Medicaid rolls and increased costs to states beyond the extra money the federal government has provided. That argument was articulated Monday in a letter to the Biden administration from 25 Republican governors, who urged him to allow the COVID public health emergency to end in April.

Both sides say that the lack of a clear deadline has needlessly complicated their planning for what everyone agrees will be a gargantuan task. At the end of the continuous enrollment period, state Medicaid departments will have to contact every Medicaid and CHIP enrollee — almost a quarter of the U.S. population — to guide them through the re-enrollment process.

“We look forward to this language being enacted so that Medicaid agencies can solidify their plans and ensure the right coverage outcomes for people on the program today, whether that’s maintaining Medicaid coverage or successfully transitioning to other coverage sources,” said Rollins, of the National Association of Medicaid Directors.