Medicaid enrollment churn — which occurs when people lose coverage and later reenroll — can result in people forgoing necessary medications or recommended preventive care and in interrupted continuity of care for chronic illnesses. Enrollees are at risk of churn during regular coverage renewals, when states review eligibility, and during redeterminations, when states review changes in circumstances that may affect eligibility between renewals. The Affordable Care Act (ACA) aimed to reduce churn, and research has found that the resulting policy changes have simplified complex Medicaid eligibility processes and reduced administrative barriers that prevent eligible people from maintaining coverage.
Despite improvements, churn has returned, after having been nearly eliminated for three years while Congress paused renewals in response to the COVID-19 pandemic. States have now resumed processing renewals; nearly 70 percent of disenrollments in the past year have been attributed to “bureaucratic mistakes,” such as failing to receive or respond to paperwork and not because people were actually determined ineligible. Other people no longer qualify for Medicaid and need help navigating the transition to other coverage, such as a marketplace plan. It is becoming increasingly clear that additional progress in minimizing churn requires not only streamlining annual coverage renewals but also adopting continuous enrollment periods.
Renewal Policies for Seniors and People with Disabilities
The ACA required states to adopt streamlined renewal policies for enrollees who qualify based solely on low income, including pregnant people, parents, children, and adults eligible through the ACA’s expansion. To date, states could choose whether to also apply these policies to enrollees who qualify for Medicaid based on old age or disability, despite the “low likelihood of changes in their income or other circumstances” among these populations. Recent federal regulations require states to adopt streamlined renewal policies for enrollees who qualify for Medicaid based on old age or disability. These changes simplify renewals for states by applying a uniform set of policies across populations. The Centers for Medicare and Medicaid Services (CMS) anticipates that after initial investments in technology and training, the new provisions will result in savings for states.
The new policies reduce the risk that enrollees who are eligible based on old age or disability will wrongfully lose coverage because of administrative hurdles. Changing these policies from optional to mandatory means that at least six states will start renewing coverage for seniors and people with disabilities annually instead of more frequently. Twenty-one states will start sending people in these eligibility groups renewal forms prepopulated with available data if the state cannot obtain the necessary information from electronic data sources. And 37 states will begin to offer or expand a reconsideration period to allow seniors and people with disabilities who lose coverage to reenroll without filing a new application if they respond to the form within 90 days of termination. States also can no longer require seniors and people with disabilities to complete an interview as part of the application or renewal process.
Change to the Redetermination Process
Eligibility redeterminations, which occur in between annual renewal periods when states receive information about changes in enrollee circumstances, also contribute to churn. CMS’s new regulations include a change in the way states handle returned mail, which has been a significant source of coverage loss and does not always indicate a loss of eligibility. The new regulations also require safeguards, such as a minimum of 30 days for enrollees to verify or dispute a change before states terminate coverage based on information from an electronic data source, such as increased income.
While the new provisions seek to minimize churn, the redetermination process remains administratively complex. In recent years, Congress, CMS, and states have shown increasing interest in stabilizing coverage between annual renewals by adopting continuous eligibility. As of January 2024, federal law requires states to provide 12-month continuous eligibility for children. A number of states have or are pursuing Medicaid waiver authority to provide multiyear continuous eligibility to children or to extend continuous eligibility to adults. Nearly all states have adopted continuous eligibility for parents in the 12-month postpartum period. Evidence has shown that continuous eligibility successfully reduces churn and its associated administrative costs. The new rule reminds states that ensuring eligible people remain enrolled is just as important as ensuring states do not cover ineligible people.
