Changes Coming to Medicaid and CHIP Programs Promise to Simplify Enrollment and Renewal

By: Jamila McLean, Senior Healthcare Policy Manager

It’s been four years since the historic decision by Congress to halt Medicaid terminations during the COVID-19 public health emergency and now one year since that protection ended, leading all states to review whether the more than 90 million people enrolled in the Medicaid and CHIP programs remained eligible. Through that process, over 20 million Americans lost Medicaid coverage, with most losing coverage as a result of procedural/administrative barriers, such as not returning paperwork, rather than being deemed no longer eligible.  

Despite this decrease in enrollment, Medicaid remains the nation’s largest health insurance program. Today, Medicaid and the Children’s Health Insurance Program (CHIP) cover over 80 million people, or more than 1 in 5 Americans.  

In September 2022, the Centers for Medicare and Medicaid Services (CMS) proposed a rule that included several provisions to streamline and simplify the enrollment and renewal processes. After a public comment period, CMS released the final rule in two parts. Part one, released in September 2023, focused primarily on changes to the program for individuals who are dually eligible for both Medicaid and Medicare. 

The long anticipated second part of the final rule was just released in April 2024 and signals an exciting step forward for Medicaid agencies. These represent some of the most significant changes to the Medicaid program since those enacted as part of the Affordable Care Act in 2010. The final rule includes new requirements that will continue to modernize the Medicaid and CHIP programs; build on the progress and lessons learned from the unwinding of the Medicaid continuous coverage requirement; and address outdated policies and processes that caused inequities and made it harder for children, older adults and people with disabilities to access and maintain health coverage. 

The changes to the Medicaid and CHIP programs include: 

  1. Aligning enrollment and renewal requirements for most individuals in Medicaid 
  2. Improving outreach to Medicaid and CHIP beneficiaries 
  3. Eliminating access barriers for children enrolled in CHIP 
  4. Streamlining transitions between health insurance programs 

Read on for details on how each change will bring welcome streamlining to the process of enrolling in and renewing Medicaid. 

Aligning Enrollment and Renewal Requirements for Most Individuals in Medicaid

Older adults and people with disabilities enrolled in Medicaid are less likely to experience changes in their income or other circumstances that would make them ineligible for the program over time. Nevertheless, they have long been excluded from the more simplified renewal process used for individuals who are eligible for Medicaid on the basis of income (known as Modified Adjusted Gross Income (MAGI) enrollees). The final rule seeks to address this by making several changes that alleviate the burden that had been placed on older adults and people with disabilities enrolled in Medicaid, known as non-MAGI enrollees, including: 

  • Requiring that renewals be conducted only once every 12 months, removing the option for states to conduct the renewal more frequently; 
  • Requiring a renewal form pre-populated with the enrollee’s information when the state is unable to conduct an ex parte/ automated renewal;  
  • Eliminating the option for states to require an in-person interview at application or renewal;  
  • Requiring that non-MAGI enrollees have the option to apply for and renew coverage via all modalities (i.e., mail, online, phone, in person) 

These changes align the processes applied to non-MAGI enrollees with those already applied to MAGI enrollees. This can significantly improve equity within the program while also reducing the burden or confusion on state Medicaid agencies to implement multiple processes for different groups of enrollees.  

Improving Outreach to Medicaid and CHIP Beneficiaries

One of the biggest challenges states faced in the resumption of Medicaid renewals was reaching their members to inform them of the upcoming renewal processes. CMS made several temporary flexibilities available to assist states during the unwinding process, including the option to accept updated addresses from reliable sources such as Medicaid Managed Care Organizations (MCOs) and the United States Postal Service National Change of Address Database. 

The final rule makes this temporary flexibility permanent and now requires states to establish a process for regularly obtaining updated contact information from reliable sources. Successful contact with Medicaid enrollees during the renewal process is crucial for reducing the likelihood of procedural churn. The rule further requires states to make a “good faith effort” to contact beneficiaries, defined as making at least two attempts and across two modalities (e.g., mail, phone, text message, etc.)  

Eliminating Access Barriers for Children Enrolled in CHIP

Although Medicaid and CHIP are often referred to as a single program, they are in fact separate. CHIP programs may impose certain restrictions that are not permitted in Medicaid, such as waiting periods and annual or lifetime limits. The final rule moves to align Medicaid and CHIP policies, removing access barriers and promoting coverage continuity by: 

  • Eliminating waiting periods: States will no longer be allowed to impose waiting periods of up to 90 days prior to CHIP enrollment, which can result in significant disruptions in accessing needed care.  
  • Prohibiting annual and lifetime limits on any CHIP benefits: This will prevent discrimination against children with higher-cost medical needs. 
  • Eliminating premium lock-out periods: States can choose to impose cost sharing for children enrolled in CHIP, such as enrollment fees, premiums, deductibles, coinsurance, and copayments. Current rules allow states to prevent children who have been disenrolled for non-payment of the premium from reenrolling in the program for up to 90 days. The new final rule will allow children to immediately reenroll following disenrollment and prevent states from collecting previous past due premiums.

Streamlining Transitions Between Health Insurance Programs

One of the key visions of the Affordable Care Act was that individuals would be able to seamlessly transition between the insurance affordability programs (i.e., Medicaid, CHIP and the state or federal health insurance marketplace) as their eligibility and circumstances change. However, many individuals and families often end up uninsured as they struggle to access and enroll in new coverage options. The final rule seeks to alleviate this by: 

  • Requiring Medicaid and CHIPs to make determinations of eligibility on behalf of the other program and provide a single combined Medicaid/CHIP notice, eliminating the potential for multiple conflicting and confusing notices. 
  • Requiring states to transfer individuals who have been procedurally terminated from Medicaid to the marketplace, increasing the likelihood that they will reenroll in coverage rather than remaining uninsured.  

The final rule will go into effect on June 3, 2024; however, states will have until 2027 to achieve full compliance. We must keep in mind that changes to Medicaid don’t operate in a vacuum, particularly for states who administer their Medicaid program using an integrated eligibility system that is also used for other benefit programs, such as the Supplemental Nutrition Assistance Program (SNAP). As Medicaid agencies embark on this work, it is an opportunity to work collaboratively with their counterparts across other public benefits to build a better safety net for all Americans.  

These new policies represent an exciting step toward stronger and more efficient Medicaid and CHIP programs with streamlined enrollment for eligible individuals – in fact, some of these policies have already been taken up by states when they were options offered during the COVID-19 pandemic. This new rule gives permission to make those permanent, eliminating the need to unwind them when the waiver ends.