The blog of the Urban Institute
March 19, 2020

Medicaid and CHIP Flexibility Can Help Safeguard Americans during the COVID-19 Crisis

Medicaid and the Children’s Health Insurance Program (CHIP) provide crucial comprehensive health coverage to more than 71 million adults and children. As the COVID-19 pandemic spreads, many more will become eligible for the programs as job losses and decreased work hours cause incomes to fall.

In this unprecedented time, state and federal governments must maximize their use of statutory and regulatory flexibility to streamline eligibility and enrollment procedures, facilitate coverage retention, and open up access to care for people who are insured by, or become eligible for, these indispensable health care safety net programs.

Federal efforts, such as the recently passed Families First Coronavirus Response Act, can help reduce cost burdens for Medicaid and CHIP enrollees by covering virus testing without cost sharing. The legislation also increases the federal Medicaid matching rate, thus relieving states of some of the cost burdens of increasing enrollment and health care use.

Even without additional federal action, states can ease the burdens for those attempting to enroll in, renew, and use Medicaid or CHIP by taking advantage of flexibility allowed under current law. Resources from the Centers for Medicare & Medicaid Services (CMS), such as the Disaster Response Toolkit and other guidelines (PDF), lay out numerous options for states.

Below are strategies that could help states safeguard vulnerable Americans’ health care during the COVID-19 crisis.

To increase state flexibility:

Take advantage of waiver options. As they did in previous crises—such as the 9/11 terrorist attacks, Hurricane Katrina, and the Flint water crisis—states can obtain Section 1115 waivers to expand coverage to people not otherwise eligible for Medicaid, streamline applications and eligibility verification, temporarily suspend or delay renewals of existing coverage, waive cost sharing, and expand benefits for targeted groups.

After 9/11, New York implemented higher income thresholds, broader immigrant eligibility rules, and a simplified application process to enroll nearly 350,000 people in Disaster Relief Medicaid.

Now that a national emergency has been declared, states can obtain Section 1135 waivers (PDF) to waive or modify certain Medicaid and CHIP requirements and ensure that sufficient health care services are available to meet enrollees’ needs.

For example, Arizona recently requested waiver authority to suspend cost sharing and premium payments during this crisis.

To streamline Medicaid and CHIP enrollment and ensure continuous coverage:

Expand outreach promoting the availability of Medicaid and CHIP coverage and the ability to apply online and by phone. Reductions in outreach and consumer assistance funding under the Trump administration mean that many potential enrollees may be unaware of subsidized coverage options, especially those who may become newly eligible.

But states could invest in outreach campaigns and use existing outreach tools to inform families of subsidized coverage availability even when they are isolated at home. Communicating about and expanding the use of online and phone applications could promote enrollment among those needing coverage. Research indicates that half of all applications are submitted online in the median state (PDF), but this varies widely across states, suggesting room for improvement in many communities.

Expand use of presumptive eligibility. Recent technological improvements have reduced application processing times. In 2018, about half (PDF) of Medicaid and CHIP applications were processed within a week or less, and more than a third were processed within 24 hours. But that may not be fast enough for those seeking immediate care in this crisis.

The Affordable Care Act expanded providers’ authority to conduct presumptive eligibility, which makes it possible to grant temporary eligibility so patients can access care while full applications are processed.

Reduce burdensome verification processes. States regularly verify enrollees’ eligibility through electronic data sources, documentation provided by beneficiaries and, in some cases, self-attestation. During the COVID-19 crisis, states can amend their verification plans (PDF) to simplify the process even further.

States are permitted to accept beneficiary self-attestation of all eligibility criteria (excluding citizenship and immigration status) when documentation is not available. States can also accept a “reasonable explanation” from a beneficiary if the income they reported does not match electronic data sources, which is particularly important for enrollees whose income may fluctuate dramatically from job instability.

Changes to verification plans do not require CMS approval (PDF) and can go into effect immediately upon submission.

Maintain continuity of coverage by extending the time between eligibility redeterminations. States are required to review enrollees’ Medicaid eligibility at least every 12 months, though some do so more frequently. As eligibility redeterminations may leave beneficiaries vulnerable to disenrollment during this public health emergency, states could embrace federal guidance that allows a full 12-month renewal timeline (PDF) to help enrollees maintain continuous coverage.  

To facilitate care and reduce financial burden:

Communicate and encourage use of services available through Medicaid and CHIP programs. Medicaid and CHIP coverage is comprehensive and includes services that may be especially needed during the current public health crisis. Screening and diagnostic services for COVID-19 are now covered by Medicaid and CHIP programs for all enrolled children and adults.

At a press briefing on March 17, CMS administrator Seema Verma reiterated that state Medicaid agencies can provide telemedicine services without federal approval—vital in rural areas, but especially beneficial now, nationwide, as social distancing becomes the norm and people are instructed to remain at home whenever possible.

Ensure that cost sharing is not a barrier to enrollment or to seeking care. Evidence suggests that even modest cost sharing is associated with lower health care utilization and thus may be a barrier for beneficiaries seeking coronavirus-related care.

The Families First Coronavirus Response Act requires all forms of insurance to cover coronavirus testing and testing-related medical visits without cost sharing. But states could also consider waiving cost sharing for other services covered in their state plans during the COVID-19 crisis. 

Crises happen. And when they do, governments must respond swiftly to protect the most vulnerable members of society. By taking aggressive advantage of the flexibility permitted by Medicaid and CHIP statutes, we can help people obtain, retain, and make optimal use of critical health coverage that can help them, and society, weather the COVID-19 crisis.

Medical assistant Mirian Fuentes and nurse Laurie Kuypers check paperwork during a COVID-19 screening at an appointment-only drive-up clinic set up by the University of Washington Medical Center Northwest Outpatient Medical Center on March 17, 2020 in Seattle, Washington. (Photo by Karen Ducey/Getty Images)

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