State Waivers for Continuous Medicaid Eligibility to End Under CMS Guidance

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On Thursday, July 17, the Centers for Medicare and Medicaid Services (CMS) released guidance notifying states that it does not anticipate approving new state proposals or extending existing approvals for section 1115 waivers with continuous eligibility provisions for children and adults in Medicaid.

Continuous eligibility generally allows individuals to remain enrolled for a specific period even if there are fluctuations in income. The Consolidated Appropriations Act, 2023 required all states to implement 12-month continuous eligibility for children beginning on January 1, 2024. States must use Section 1115 waiver authority to extend continuous eligibility to adults (or certain adult subpopulations), as well as to provide multi-year continuous eligibility for children.

Twelve states have received approval to provide continuous eligibility waivers (Table 1). Nine states provide multi-year continuous eligibility for children, with most providing continuous coverage for young children from birth to age six. Eight states provide varying lengths of continuous eligibility to certain adults. While existing waivers do not appear to be affected, CMS will not renew approval of expenditure authority. The earliest waiver expiration date is in December 2025, although some are not due to expire until 2029.

CMS cites concerns about fiscal and program integrity. At the same time, data show continuous eligibility reduces Medicaid disenrollment and “churn” rates (rates of individuals temporarily losing Medicaid coverage and then re-enrolling within a short period of time). When individuals churn on and off coverage, the gaps in coverage may limit access to care or lead to delays in getting needed care, which can be especially problematic for young children who receive frequent screenings and check-ups. Research has found continuous eligibility for Medicaid is associated with improved child health.

Ending continuous eligibility waivers will increase disenrollment due to more frequent eligibility determinations, but not everyone who loses coverage at renewal is no longer eligible. During the unwinding of the Medicaid continuous enrollment provision, seven in ten Medicaid enrollees who lost coverage were disenrolled for procedural reasons. While some were no longer eligible, others lost coverage due to barriers such as communication issues.  

1115 waivers generally reflect priorities identified by states as well as changing priorities from one presidential administration to another. Previous actions from the Trump administration earlier this year signaled efforts to curtail waivers related to social determinants of health and to limit waiver financing tools and flexibility. CMS also announced on Thursday that it does not anticipate approving new or extending existing Medicaid-funded workforce initiatives to strengthen the workforce for primary care, behavioral health, dental, and home and community based services.