5 Targeted Actions a Biden Administration Could Use to Expand Medicaid Coverage
The recent election of former Vice President Joe Biden as well as the on-going effects of the coronavirus pandemic and related economic downturn are the key issues that will substantially shape Medicaid policy over the next year. The President-elect has supported the Medicaid expansion under the Affordable Care Act (ACA) and has proposed broader coverage expansions using a federal public option to cover more low-income Americans, including those in states that have not expanded. Such proposals require Congressional Action that will likely be difficult to pass in a closely divided Senate, and particularly so without Democratic control. Barring major legislative initiatives, there are a number of more targeted actions that the new Administration could implement to expand Medicaid coverage. While these approaches have the potential to reduce the number of people uninsured, they could also increase federal and state spending, which could pose particular challenges at the state level during a period of tight revenues and increasing needs.
Revise Section 1115 Waiver Policy to Support Coverage
The Biden Administration can revise current demonstration waiver policy to focus on expanding coverage and rescind or reverse waiver policies that limit coverage, including work requirements and other restrictive provisions. Section 1115 waiver priorities may change from one presidential administration to another. While each administration has some discretion over which types of waivers to approve and encourage, that discretion is not unlimited: the HHS Secretary must determine that the waiver will promote program objectives as set out by Congress. The Biden Administration could revise the Section 1115 waiver approval criteria to include expanding coverage, a provision removed by the Trump Administration. The Biden Administration also could rescind CMS guidance that invites state waivers to condition Medicaid eligibility on work requirements; stop defending waiver approvals involving work requirements and other restrictive provisions in lawsuits in AR, NH, IN, and MI; and reject pending work requirement waivers. The Biden Administration will face these issues as soon as it takes office, because the Supreme Court is hearing cases involving the Arkansas and New Hampshire work requirement waivers this term. In addition, the Biden Administration could review provisions, such as work requirements, in currently approved waivers and renewal requests and move to withdraw or not renew waivers that are not promoting program objectives.
The Biden Administration can approve or encourage waivers that would expand coverage to targeted groups or help make Marketplace coverage more affordable. For example, the Biden Administration could approve pending waivers and encourage additional waivers to extend the postpartum coverage period beyond 60 days, or encourage waiver proposals to extend coverage to incarcerated individuals prior to release, and to allow 12-month continuous eligibility for adults. Massachusetts and Vermont were able to leverage existing Medicaid Section 1115 waivers to secure federal Medicaid matching funds to help finance enhanced premium subsidies for Marketplace coverage. Some states had debated and Washington state enacted a public plan option designed to spur competition and lower costs for Marketplace enrollees, but without any type of waiver from the federal government. While the Trump administration has discouraged use of waivers under Section 1332 to expand public coverage, the Biden administration could provide guidance to states on using Medicaid 1115 waivers in combination with Section 1332 waivers to advance these public plan proposals or other strategies, along with the potential flexibility to reinvest any federal savings from lower costs for ACA premium subsidies to improve affordability for consumers and expand coverage.
The Biden Administration could encourage states to adopt certain waiver policies by establishing a template with options to expand coverage and with streamlined approval. One constraint in using waivers to expand coverage is that it has been longstanding federal policy to require that waivers be budget neutral for the federal government, meaning federal costs under a waiver must not exceed what federal costs would have been for that state without the waiver. Unlike before the ACA, states do not need to find savings to extend coverage to adults without dependent children.
Extend the Public Health Emergency (PHE)
The Biden Administration can extend the COVID-19 public health emergency (PHE) declaration, which will extend access to the temporary increase in the Medicaid match rate as well as Maintenance of Eligibility (MOE) requirements including continuous coverage. The PHE currently is set to expire on January 20, 2021. The Families First Coronavirus Response Act provided a 6.2 percentage point increase in the federal share for non-expansion Medicaid spending with requirements to maintain eligibility and provide continuous coverage for all Medicaid enrollees. The enhanced match is in place until the end of the quarter in which the PHE ends, while the continuous coverage requirement of the MOE is in place until the end of the month in which the PHE ends. The enhanced FMAP provides broad fiscal relief states and also supports increases in enrollment tied to the MOE and the economic downturn. Under the MOE, states cannot make eligibility standards or enrollment procedures more restrictive or increase premiums while they are receiving enhanced federal funds.
States are using emergency authorities to adopt a number of policy options to facilitate Medicaid coverage that are also tied to the PHE. Beyond the MOE requirements, nearly all (47) states are making changes to streamline eligibility and/or enrollment to help connect people to coverage more quickly during the pandemic. States are also using emergency authorities to expand eligibility for individuals who need long-term services and supports. Over half of states have expanded eligibility criteria for seniors and people with disabilities, while a few states have increased the total number of home and community-based waiver enrollees served. Nearly all states have streamlined enrollment processes, and over one-third of states have eased premium and/or cost-sharing requirements for seniors and people with disabilities. Extending the PHE would also extend use of many of these emergency authorities.
The Biden Administration could also expand the use of Section 1115 waivers during the PHE. The Trump Administration released a waiver template for COVID-19 related changes that were primarily focused on allowing states to adopt certain LTSS policies, and approvals to date have been related to requests made under the template. For example, CMS did not approve Washington’s request to establish a temporary eligibility group to provide additional Marketplace subsidies for individuals with incomes at or below 200% FPL. CMS also has not yet approved Washington’s request to use Medicaid waiver authority create a Disaster Relief Fund to cover costs associated with the treatment of uninsured individuals with COVID-19, housing, nutrition supports and other COVID related expenditures. Historically, states have used Section 1115 authority to expand coverage and/or reimburse uncompensated care to address the direct impact of natural disasters and public health emergencies.
Remove Barriers to Coverage Post PHE
A Biden Administration can work with states to help support coverage after the PHE ends. The Biden Administration can help and encourage states to transition policies that expand eligibility and streamline enrollment adopted under emergency authorities to permanent authorities after the PHE. In addition, the Biden Administration can develop guidance to ensure that those who are eligible stay enrolled in Medicaid at the end of the PHE. When states were implementing updated enrollment systems and processes to comply with the ACA, CMS worked with states to delay and stagger renewal and redetermination processes and also to suspend Payment Error Rate Measurement (PERM) reviews.
A Biden Administration could issue guidance to encourage states to take up existing options to support coverage. Such options include removing the 5-year coverage ban for recent pregnant women or children immigrants, using presumptive eligibility for one or more groups to expedite enrollment in Medicaid or CHIP, providing 12-month continuous eligibility to children in Medicaid or CHIP, and taking into account reasonably predictable changes in income when determining eligibility. In addition, states can adopt processes to improve communications with enrollees such as taking proactive steps to update enrollee address information and following up on returned mail by calling and/or sending email or text notifications. Many of these options could play an even more significant role as states resume renewals and redeterminations post PHE.
A Biden Administration can reverse current policies that impose enrollment barriers making it more difficult for those who are eligible for Medicaid to maintain coverage. While current rules require states to act when enrollees report a change in circumstances that may affect their continued eligibility, the Trump Administration has encouraged use of periodic eligibility checks as a program integrity strategy and has encouraged states to conduct enhanced eligibility verification and more closely monitor changes in enrollee circumstances. While such measures were encouraged to reduce instances of ineligible people being enrolled in the program and other eligibility errors, they also have resulted in creating greater enrollment barriers for people who remain eligible for the program. Research and experience show that increased requirements associated with eligibility determinations and renewals can lead to decreases in coverage among eligible people due to difficulties completing administrative processes and providing documentation. Such policies were likely a factor contributing to declines in Medicaid enrollment prior to the pandemic.
The Biden Administration can reverse proposed changes to Supplemental Security Income (SSI) disability review rules, which could impact Medicaid eligibility for people with disabilities. The Trump Administration proposed changes to Social Security regulations that would increase the number and frequency of “continuing disability reviews” for children and adults who receive SSI benefits. SSI is federal cash assistance for people with low incomes, limited assets, and significant disabilities. SSI is an important Medicaid eligibility pathway for people with disabilities. Increasing the frequency of SSI continuing disability reviews could result in some enrollees losing Medicaid coverage for which they remain eligible, due to difficulty navigating the administrative process.
Expand Outreach Efforts
A Biden Administration can increase outreach and enrollment efforts for Medicaid and Marketplace coverage. Since taking office, the Trump Administration has dramatically reduced funding for federal marketplace Navigators that were created to provide outreach, education, and enrollment assistance to consumers eligible for Marketplace and Medicaid coverage and now requires that they be funded by the marketplaces. Compared to 2016, federal Navigator funding for FY 2020 was reduced by 84% on average. Outreach under the ACA was also reduced by 90%. A Biden Administration could restore federal spending for navigators and on marketing and outreach. The new administration could also provide funding to states for outreach and enrollment assistance in Medicaid. Recent analysis suggests that there is a shortage of consumer assistance resources, even as lack of knowledge of ACA coverage options among the public persists. With the coronavirus crisis causing record job losses, increased investment in outreach and enrollment assistance could ensure people losing their job-based health coverage understand other coverage options and can get needed help applying for and enrolling in other coverage.
Propose More Targeted Legislative Changes
Narrow legislative proposals could encourage states to adopt the ACA Medicaid expansion. If Congressional support for more sweeping health care proposals is lacking – including a public option that would cover poor adults in states that have not expanded Medicaid — the Biden Administration may consider more targeted legislative changes to Medicaid to encourage Medicaid expansion, such as legislation to allow 100% federal matching funds for states that newly adopt the expansion for a period of time. Under the ACA, states that adopted the Medicaid expansion received 100% federal matching funds for three years (from 2014-2016) and the match has gradually phased down to 90% where it remains. Without a change in the law, states that newly expand would be eligible for the 90% match rate for expansion coverage. Twelve states have not adopted the Medicaid expansion, leaving many poor adults in a coverage gap, not eligible for Medicaid or Marketplace subsidies.
Legislative proposals could focus on extending coverage for specific populations including postpartum women, those needing community based long-term care, those ready to transition out of the criminal justice system and recent immigrants. There has been bi-partisan support for legislation that would allow states to extend postpartum Medicaid coverage from the current 60 days to 12 months. Other targeted legislative bi-partisan legislative proposals include the Medicaid Reentry Act (included in the House passed COVID-relief package) would allow Medicaid to cover services for Medicaid beneficiaries who are incarcerated during the 30 days preceding their release from prison or jail which could facilitate coverage and access post-release. The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act also includes a provision offering states a time-limited 10% enhanced FMAP for activities to increase HCBS during and after the PHE period ends, including increasing the number of individuals receiving HCBS. Finally, the Biden Administration could work with Congress to allow states the options to allow coverage for recent immigrants (eliminating the 5 year coverage bar) for groups other than pregnant women and children.
Additional fiscal relief can bolster states’ ability to support and sustain increases in Medicaid coverage. President-elect Biden has indicated support for further increasing the FMAP and may try to work with Congress to enact legislation though Republican leaders have generally been opposed to substantial increases in state and local assistance during the pandemic and economic crisis. The Medicaid and CHIP Payment and Access Commission (MACPAC) at the December 2020 meeting announced moving toward a recommendation calling for an automatic Medicaid countercyclical financing model based on earlier recommendations from the General Accountability Office (GAO). The HEROES Act passed by the House in May and then updated and passed again in October would increase the enhanced FMAP to 14% effective through September 2021 to support states as the COVID-19 pandemic continues providing states with an estimated $55.5 billion in federal support according to the Congressional Budget Office. Congress could also consider alternative options to target the relief to states experiencing higher enrollment increases. However, it remains unclear if Congress will provide additional relief through the FMAP or if they will revisit the MOE requirements as part of another coronavirus relief package.