Introduction
In December 2022, the U.S. Congress took a step to address churn—where enrollees lose Medicaid coverage, often for procedural reasons, and later reenroll after a gap in coverage—in the Consolidated Appropriations Act, 2023 (CAA). Beginning January 1, 2024, states are now required to provide 12 months of continuous eligibility (CE) to children up to age 19 who are enrolled in Medicaid or the Children’s Health Insurance Program (CHIP).1 States have had the option to provide 12-month CE for children and youth in Medicaid and CHIP since 1997, and 33 states had taken up that option in one or both programs as of November 2023. Now, the CAA has made this policy a requirement of all state Medicaid and CHIP programs.
Churn in Medicaid and CHIP impacts children’s access to care. In 2018, 8 percent of all children enrolled in Medicaid and CHIP experienced churn, with significant variations across states.2 This churn, and resulting loss of coverage, may occur when families experience a change in circumstances such as a temporary change in income, household members or residence. These changes often trigger paperwork and other administrative requirements that can lead to coverage losses between annual renewals. Research demonstrates CE is an effective strategy to reduce rates of churn in Medicaid and CHIP. Ensuring continuity of coverage for children, in particular, can support their access to regular checkups and other preventive care during critical early years of development and throughout adolescence. CE policies also reduce administrative burden and costs related to churn for individuals, states, providers and health plans.3
This article reviews the current landscape of CE and opportunities for states to build upon the 12-month CE policy to adopt multiyear CE for children and youth and other vulnerable populations in Medicaid and CHIP.
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Current State: CE During the COVID-19 PHE and State Renewal Processes
States received increased federal Medicaid funds during the COVID-19 public health emergency (PHE), conditioned on keeping individuals, including children and youth, continuously enrolled in Medicaid throughout the PHE (referred to in this article as the PHE CE provision). By 2023, over one in two children in the United States were insured by Medicaid and CHIP, driven in part by the PHE CE provision. Currently, states are performing large volumes of eligibility redeterminations for Medicaid and CHIP—known as the “unwinding” of the PHE CE requirement—and many children and youth are projected to lose, or have already lost, coverage due to paperwork requirements associated with navigating the renewal process. The most recent CMS data release in December 2023 indicates that 23 percent of all Medicaid enrollees due for renewal in September were disenrolled; 65 percent of disenrollment was due to procedural reasons.
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12-Month CE Implementation
With the 12-month CE CAA provision effective nationwide this month, states have a new imperative to ensure children and youth in Medicaid and CHIP secure uninterrupted coverage for at least 12 months from their most recent eligibility determination. In preparation for this new policy feature going live, the Centers for Medicare & Medicaid Services (CMS) published guidance clarifying that the over one dozen states that did not previously have 12-month CE needed to submit a State Plan Amendment (SPA) to come into compliance with the CAA. States with more limited types of CE under the earlier option (e.g., six-month CE, 12-month CE up to age 6) also had to submit SPAs to ensure their coverage fully complies with the new 12-month CE requirement for children and youth in Medicaid and CHIP.
CMS provided additional guidance on how states may implement the policy for two specific pediatric populations impacted by 12-month CE, including:
- Children and Youth Involved in the Justice System
- Individuals in the Conception-to-End-of-Pregnancy Option
For more information on this CMS guidance, see this Manatt Health and State Health & Value Strategies analysis.
Building Upon 12-Month CE With Multiyear CE
While 12 months of CE will reduce churn between renewal periods, children and youth will still be vulnerable to losing coverage for procedural reasons like paperwork requirements at the annual renewal. A 2022 KFF analysis found churn among children enrolled in Medicaid increased during annual renewal processes, even in states with 12-month CE policies. To address this, states may consider implementing multiyear CE through a Section 1115 demonstration. Under “multiyear CE” policies, states do not conduct annual eligibility redetermination and instead continue the child’s coverage until their multiyear CE period has concluded for all children enrolled in Medicaid and CHIP, with limited exceptions, such as when the child moves out of state. Implementation of multiyear CE can be particularly important for children to ensure uninterrupted coverage and access to care. It can also help reduce disparities in coverage. States adopting multiyear CE have reduced administrative burden and costs related to churn and disenrollment.
Many states are pursuing multiyear CE for children and adults enrolled in Medicaid and CHIP through Section 1115 waiver authority. The following states have already received Section 1115 demonstration approvals from CMS to provide multiyear CE:
- Oregon received first-in-the-nation approval in September 2022 to provide CE to children from birth through age 5, as well as 24-month CE for individuals ages 6 and older.
- Similar to Oregon, Washington received CMS approval to provide CE to children from birth through age 5.
- Massachusetts received CMS approval in August 2023 to offer 24-month CE to children and adults experiencing homelessness and 12-month CE to youth and adults following release from correctional institutions.
- New Mexico received approval in December 2023 to provide CE to children from birth through age 5.
North Carolina submitted a Section 1115 demonstration application in October 2023 to provide CE for children from birth through age 5, and 24 months of CE for children ages 6 through 18. Hawaii and Pennsylvania are earlier in the 1115 demonstration process and have released demonstration applications for public comment with CE proposals to cover children from birth through age 5; Hawaii would also provide 24 months of CE for older children. Arizona has a pending Section 1115 amendment to provide multiyear CE to former foster youth who have aged out of foster care at age 18 and up to age 26.
Conclusion
The new CAA requirement allows states to stabilize health coverage and access to care for children and youth, and new demonstration opportunities offer the potential to explore expansion of CE beyond the 12-month requirement with multiyear models. Expansion of CE for children can help further reduce rates of churn in Medicaid and CHIP, lessen administrative burden and costs on both individuals and states, and support children and youth access to the critical health care they need to thrive. As states and CMS gain experience with CE for children, multiyear CE for other populations may expand to include adult populations in Medicaid that would similarly benefit from more stable coverage and access to care as well as individuals who are experiencing homelessness or are justice involved.
1 On November 16, 2023, State Health and Value Strategies hosted a webinar on state preparation to implement the new requirement. Slides from the webinar are available here and a recording is available here.
2 Eight percent of children enrolled in Medicaid modified adjusted gross income (MAGI) eligibility groups experienced churn, consistent with the overall average. Children eligible on the basis of a disability experienced churn at the lowest rate (3 percent).
3 Swartz K, Short PF, Graefe DR, Uberoi N. Reducing Medicaid Churning: Extending Eligibility For Twelve Months Or To End Of Calendar Year Is Most Effective. Health Aff (Millwood). 2015 Jul;34(7):1180-7. doi: 10.1377/hlthaff.2014.1204. PMID: 26153313; PMCID: PMC4664196.