Section 1115 Waiver Watch: Continuous Eligibility Waivers and Implications for Unwinding
Sweta Haldar and Madeline Guth Follow @Madeline_Guth on Twitter Apr 24, 2023
Starting April 1, 2023, states can resume Medicaid disenrollments for the first time in three years. The Families First Coronavirus Response Act (FFCRA) enacted at the start of the COVID-19 pandemic included a requirement that state Medicaid programs keep people continuously enrolled in exchange for enhanced federal matching funds. The Consolidated Appropriations Act (CAA) passed in December 2022 set an end date of March 31, 2023 for the continuous enrollment provision. KFF estimates that this provision has contributed to a 33% increase in Medicaid enrollment. An estimated 5 to 14 million people could lose Medicaid coverage during the unwinding of the provision.
How states manage the unwinding process could affect how many people are able to maintain coverage or transition to other coverage if they are no longer eligible. While all enrollees will need to undergo a renewal process during the unwinding, states can promote continuity of coverage after renewal by providing continuous eligibility to certain populations. This Waiver Watch summarizes approved and pending Section 1115 demonstration waivers in seven states with continuous eligibility provisions that could help minimize coverage loss.
Under current law, states have the option to extend 12-month continuous eligibility for children and for postpartum coverage. Under a continuous coverage policy, individuals who are determined to be eligible can maintain Medicaid coverage for a specific period of time, regardless of fluctuations in income, before a redetermination period to determine ongoing eligibility. These policies have been shown to decrease churn, which occurs when individuals temporarily lose Medicaid coverage and disenroll and then re-enroll within a short period of time. As of January 2023, 33 states have adopted the option that is available under current law to provide 12-month continuous eligibility for some or all children in Medicaid and/or CHIP. Under the CAA, starting in 2024, all states will be required to provide 12-month continuous eligibility for children. The American Rescue Act Plan (ARPA) allowed states a temporary option to provide 12-month postpartum coverage, and the CAA made this option permanent. States cannot provide continuous coverage to children or postpartum individuals for longer than 12 months—or to other adults at all—without a waiver.
Six states (KS, MA, NJ, NY, OR and WA) have approved waivers and one state (NM) has a pending request to extend continuous eligibility beyond what is allowed under federal law (Table 1). Section 1115 waivers allow states to obtain federal approval to operate their Medicaid programs in ways that differ from what is required by federal statute. Recently, seven states have sought such waivers to provide continuous eligibility that is more generous than otherwise allowed, for children (3 states) and/or adults (5 states). These waivers also vary by:
- Duration of coverage: KS, MA, NY and NJ have received approval for 12-month continuous eligibility for all or some adults (and MA will also provide 24-month continuous eligibility to certain adults). OR is the first state to receive authorization to provide two years of continuous eligibility for all enrollees age six and over. OR and WA also have approval to provide continuous coverage for young children through age six, and NM has requested a similar provision.
- Target population: In addition to targeting children and/or adults, states may place other limits on the populations eligible for continuous coverage policies. The majority of states (NY, NJ and OR) have received or are seeking approval to provide continuous eligibility to all income-eligible enrollees. However, KS will limit 12-month continuous eligibility to parents and caretaker relatives. MA will provide 12-month continuous eligibility for individuals following release from a correctional institution and 24-month continuous eligibility for individuals experiencing homelessness.
Looking ahead, continuous eligibility policies will remain an important lever for stabilizing Medicaid coverage, following the unwinding of the continuous enrollment provision. As noted above, the CAA mandates all states to implement 12-month continuous eligibility for children in Medicaid and CHIP, starting in 2024. Mandatory continuous enrollment can help children maintain coverage. KFF analysis suggests that Hispanic children may be more likely to experience income volatility or lose coverage at renewal for procedural reasons than children of other races, so these policies may also reduce racial disparities and promote health equity. As the COVID-19 continuous enrollment provision unwinds, new continuous eligibility policies that some states are pursuing through 1115 waivers can provide stable coverage beyond the limits allowed or required under current rules. Such policies are expected to increase Medicaid enrollment and therefore costs overall, but are also likely to minimize churn, reduce administrative costs, improve health outcomes and potentially decrease per enrollee costs due to less fragmented care.