As 2023 kicks off, numerous points are at play that might have an effect on protection and financing beneath Medicaid, the first program offering complete well being and long-term care protection to low-income People. The Consolidated Appropriations Act, handed in December 2022, ends the Medicaid steady enrollment provision on March 31, 2023 with a phase-down in enhanced federal matching funds. The unwinding of this provision, in addition to the trajectory of the pandemic and the economic system, can have implications for Medicaid enrollees, suppliers, managed care plans, and the states that function these applications. A divided Congress will make it tough to move federal laws, and whereas the Administration is predicted to proceed to make use of present authority to enhance protection, entry, and well being fairness, restricted motion on the federal degree will push much more coverage focus to the states. The primary glimpse of state coverage priorities will likely be revealed in Governors’ state of the state addresses and proposed budgets. Inside this context, this situation temporary examines key points to observe in Medicaid in 2023.
Medicaid Protection and Financing
The Medicaid steady enrollment provision in place in the course of the pandemic has elevated enrollment and decreased the uninsured charge, however will finish in March 2023. Provisions within the Households First Coronavirus Response Act (FFCRA) required states to make sure steady enrollment in Medicaid in change for enhanced federal matching funds in the course of the Public Well being Emergency (PHE). Largely as a consequence of these insurance policies, enrollment in Medicaid and the Youngsters’s Well being Insurance coverage Program (CHIP) grew to 91 million in September 2022, a rise of 27.9% from February 2020 (previous to the pandemic). KFF estimates that by way of federal fiscal 12 months 2022, states acquired greater than double the quantity in federal fiscal aid relative to the prices of enrollment because of the steady enrollment provision, with some variation throughout states. The Consolidated Appropriations Act ends the continual enrollment provision on March 31, 2023, and phases down the improved federal Medicaid matching funds by way of December 2023. States can resume disenrollments starting April 1 however should meet sure eligibility and reporting necessities to proceed to be eligible for enhanced funding. An estimated 5 to fifteen million folks might lose Medicaid protection throughout unwinding and the way states handle the method might have an effect on how many individuals are in a position to preserve protection.
Debate about Medicaid growth will shift again to the states. Democrats in Congress final 12 months mentioned a federal choice to fill within the Medicaid protection hole however in the end didn’t move it, and such an method is now extremely unlikely with divided management in Washington. The American Rescue Plan Act (ARPA) included a two-year fiscal incentive to encourage remaining “non-expansion” states to newly undertake the Inexpensive Care Act (ACA) Medicaid growth. Over 2 million people dwelling within the 11 states that haven’t adopted the (ACA Medicaid growth fall into the “protection hole”). These people don’t qualify for Medicaid (as their revenue exceeds Medicaid eligibility limits of their respective states) however have incomes beneath poverty, making them ineligible for premium subsidies within the ACA Market. A KFF evaluation reveals that every one non-expansion states would see a internet fiscal profit from the ARPA incentive for 2 years in the event that they undertake the growth. The ARPA federal incentive reignited dialogue round Medicaid growth in a few non-expansion states over the past state legislative session. Notably, each state that has adopted growth since 2019 has finished so not by way of legislative or govt processes, however on account of a profitable poll initiative. Most just lately, South Dakota turned the fortieth state to develop Medicaid after voters accredited a poll query in November 2022. Though growth poll initiatives have been profitable in all seven states the place they’ve gone to voters (Idaho, Maine, Missouri, Nebraska, Oklahoma, and Utah), a lot of the remaining non-expansion states should not have poll initiative processes. North Carolina often is the state most probably to develop Medicaid subsequent given how far efforts superior final 12 months, with lively efforts in Kansas and Wyoming as properly.
Some states and the Administration are anticipated to proceed to implement incremental insurance policies to develop protection. ARPA included an choice, made everlasting within the Consolidated Appropriations Act, to permit states to increase postpartum protection from 60 days to 12 months. Below present regulation, after the 60 days of postpartum protection, many individuals who qualify for pregnancy-related Medicaid lose that protection as a result of Medicaid eligibility ranges for folks are a lot decrease than for pregnant folks in most states, and particularly in non-expansion states. As of January 2023, greater than two-thirds of the states have taken steps to increase postpartum protection. The Consolidated Appropriations Act additionally included a requirement for all states to implement 12 months of steady protection for kids. As well as, Oregon acquired waiver approval to supply steady eligibility for kids from start to age 6 and a pair of years of steady eligibility for all enrollees ages 6 and up, together with adults; different states are looking for comparable waivers for multi-year steady eligibility. KFF evaluation reveals that for kids, steady eligibility insurance policies assist to supply protection stability. Lastly, the Administration launched a proposed regulation designed to make it simpler for people to acquire and retain protection.
New state and federal consideration to Medicaid financing might emerge in 2023. Medicaid financing is shared by the federal authorities and the states. Consequently, financial components that have an effect on state revenues together with inflation, provide chain points, and declining labor drive participation charges, together with phase-down of the improved FMAP tied to the tip of the continual enrollment provision can have fiscal implications for states. In our annual state survey, states famous that inflation and workforce shortages have been driving increased labor prices and strain from suppliers for charge will increase. Many states use reimbursement methodologies for some supplier sorts, akin to nursing amenities, that will mechanically alter for inflation. As well as, on the federal degree the Home of Representatives is prone to deal with measures to scale back the federal deficit and, whereas unlikely to move within the Senate, proposals to restrict federal spending for Medicaid might be debated once more in Congress.
What to Watch:
- What’s going to occur to Medicaid enrollment in the course of the unwinding of the continual enrollment provision? How will adjustments fluctuate throughout states? How many individuals dropping Medicaid protection will transition to different sources of insurance coverage just like the Inexpensive Care Act marketplaces, and what’s going to occur to the variety of uninsured?
- Will any extra states implement Medicaid growth or different protection expansions like 12-month postpartum protection?
- How will administrative actions, together with oversight of the unwinding of the continual enrollment provision, waiver approvals, and new rules contribute to adjustments in protection?
- How will broader financial components, like inflation, have an effect on state financing of Medicaid and can Congress debate broader proposals to cap federal Medicaid spending?
Entry and Well being Fairness
Capitated managed care stays the predominant supply system for Medicaid in most states. Greater than three-quarters of states that contract with MCOs (35 of 41) reported that 75% or extra of their Medicaid beneficiaries have been enrolled in MCOs as of July 1, 2022. A number of states have just lately carried out Medicaid managed care applications. Starting July 1, 2021, North Carolina carried out its first MCO program, enrolling greater than 1.8 million Medicaid beneficiaries in MCOs as of December 2022. Missouri carried out the ACA Medicaid growth in October 2021, enrolling all growth adults in Medicaid MCOs, and Oklahoma expects to implement capitated, complete Medicaid managed care in October 2023. State managed care contracts fluctuate broadly within the populations required to enroll, the providers lined, and the high quality and efficiency incentives and penalties employed. 5 multi-state, for-profit “guardian” corporations – Centene, UnitedHealth Group, Anthem, Aetna/CVS, and Molina – every have Medicaid MCOs in 12 or extra states and account for half of all Medicaid MCO enrollment. MCOs are anticipated to play a big function in serving to enrollees preserve protection in the course of the unwinding of the continual enrollment provision. The Administration is predicted to launch revised rules about Medicaid managed care and assuring entry in Medicaid within the Spring of 2023.
In response to the pandemic, all states took motion to develop protection and entry to telehealth in Medicaid, notably for behavioral well being providers. Specifically, practically all states added or expanded audio-only telehealth protection. These coverage adjustments contributed to excessive telehealth utilization by Medicaid enrollees in the course of the pandemic, total and particularly for behavioral well being providers. The speedy growth of Medicaid telehealth insurance policies and utilization has prompted state and federal questions in regards to the high quality of providers delivered through telehealth. Most states have carried out or are planning initiatives to evaluate telehealth high quality, although many states report ongoing issues and uncertainty over the right way to successfully consider high quality. States additionally report actions to deal with different telehealth challenges, together with entry to expertise and broadband, program integrity, outreach and schooling, and fairness. Most states have or plan to undertake everlasting Medicaid telehealth expansions that may stay in place after the pandemic, together with expansions of allowable modalities, providers, and suppliers. On the similar time, some states are contemplating guardrails on such insurance policies, notably for audio-only telehealth.
Past telehealth, many states are taking steps to develop entry to behavioral well being providers because the pandemic has heightened demand for these providers. 9 in ten People consider the nation is within the midst of a psychological well being disaster. Behavioral well being circumstances (i.e., psychological well being and substance use issues) are extra prevalent in Medicaid enrollees in comparison with folks with different protection, with knowledge from 2020 exhibiting that roughly 39% of Medicaid enrollees have been dwelling with a psychological well being or substance use dysfunction. States have been increasing behavioral well being advantages and entry to care, together with by adopting methods to bolster the behavioral well being workforce. These state efforts monitor with continued exercise on the federal degree: the Consolidated Appropriations Act and the 2022 Bipartisan Safer Communities Act included an array of provisions to develop entry and funding for behavioral well being, akin to provisions to require steering on increasing Medicaid-covered psychological well being providers in colleges, develop Licensed Group Behavioral Well being Clinics (CCBHC), fund new psychiatry residency positions, and get rid of administrative necessities to prescribe buprenorphine.
States and the Administration have recognized advancing well being fairness as an essential precedence for the Medicaid program. The pandemic exacerbated longstanding racial and ethnic disparities in well being and well being care. Medicaid insurance policies that might assist handle well being fairness embody closing the “protection hole” for adults in non-expansion states; growing protection amongst these eligible however not enrolled; and increasing advantages akin to being pregnant and postpartum providers, housing and housing-related helps, and neighborhood well being employee providers. Excessive-quality, complete knowledge are important for figuring out and addressing well being disparities and measuring progress over time and nearly all of states are implementing methods to enhance race, ethnicity, and language (REL) knowledge completeness. States are additionally utilizing MCO monetary high quality incentives (e.g., efficiency bonuses, withholds) tied to well being equity-related efficiency objectives and different MCO contract necessities to advance well being fairness. Different reported state Medicaid initiatives to scale back racial well being disparities embody outreach to underserved populations, growing cultural competency, and establishing departments and devoted employees positions centered on selling fairness. As well as, states have acquired or are looking for Part 1115 waivers that goal to advance fairness.
States and the Administration are implementing methods to leverage Medicaid to deal with social determinants of well being (SDOH) by way of managed care and Part 1115 waivers. The Biden Administration has inspired states to suggest waivers that develop protection, cut back well being disparities, and/or advance “whole-person care,” together with by addressing health-related social wants (HRSN). Current waivers accredited in 4 states (AR, AZ, MA, and OR) embody HRSN providers to deal with meals insecurity and/or housing instability for focused populations. Moreover, following the approval of a California proposal to make use of “in lieu of” providers (ILOS) to supply a menu of health-related providers by way of managed care authority, the Facilities for Medicare and Medicaid Providers (CMS) just lately launched extra steering on the usage of in lieu of providers and settings in Medicaid managed care to scale back well being disparities and handle unmet HRSN (akin to housing instability and vitamin insecurity).
What to observe?
- How efficient will state and administration efforts to leverage Medicaid be in addressing SDOH and lowering well being disparities? How will states use authorities together with Part 1115 and managed care to pursue these objectives?
- What sorts of everlasting telehealth expansions and/or guardrails will state Medicaid companies undertake, and the way will these coverage adjustments be told by knowledge analyses, federal steering, and price considerations?
- Will the Administration launch new steering in 2023 to deal with entry to care and what provisions will likely be included within the anticipated entry and revised managed care rules?
- Will Congress move extra laws and / or will states take extra actions to enhance entry to and funding for behavioral well being providers?
Enrollment and Entry Amongst Folks Eligible for Medicaid by way of Age or Incapacity
The brand new proposed rule on eligibility and enrollment might improve enrollment amongst all Medicaid eligibility teams, however particularly amongst seniors and other people with disabilities. A proposed rule designed to make it simpler for folks to acquire and preserve protection in Medicaid and CHIP consists of provisions to simplify the enrollment and renewal processes for seniors and other people with disabilities by making use of lots of the ACA’s simplified eligibility processes for kids and different grownup eligibility teams to those teams. There would even be simplified enrollment procedures for individuals who obtain supplemental safety revenue and people who find themselves enrolled in Medicare however eligible for Medicaid protection of Medicare premiums. KFF evaluation finds that over one-third of Medicare-Medicaid enrollees lose Medicaid protection inside one 12 months of their preliminary enrollment, which is without doubt one of the causes for the proposed adjustments. CMS expects that the rule would improve Medicaid enrollment by practically 3 million full-year equivalents, with seniors and other people with disabilities accounting for over half of that complete.
Employees and residents at long-term care amenities have been disproportionately affected by the pandemic. Over one-fifth of all deaths from COVID-19 have been amongst residents and employees in long-term care amenities as of June 12, 2022. Though preliminary vaccination charges have been excessive and the loss of life charge amongst nursing facility residents and employees dropped, take-up of boosters and of the brand new bivalent booster has been a lot decrease. Going into the 2022-2023 winter interval, fewer than half of residents and one quarter of employees have been up-to-date with their vaccinations, which can lead to increased loss of life charges transferring ahead. Compounding the challenges with COVID-19 sickness is the continuing workforce scarcity for long-term care amenities. Whereas employment in most well being care sectors has rebounded from the sharp drop in March 2020, employment in long-term care amenities stays well-below pre-pandemic ranges.
The pandemic additionally highlighted workforce shortages and unmet want amongst individuals who use long-term providers and helps (LTSS) delivered in house and neighborhood settings (HCBS). In a KFF survey of HCBS applications, practically all states reported that workforce shortages have been the primary influence of the COVID-19 pandemic on HCBS providers and 44 states reported that at the least one HCBS supplier completely closed. Nearly all states elevated cost charges in response, however a few of these will increase are short-term somewhat than everlasting. Many adjustments to HCBS applications relied on short-term funding by way of the ARPA or short-term authorities out there in the course of the PHE. Policymakers of each events have known as for extra and longer-term adjustments to HCBS together with eliminating ready lists for providers, growing alternatives for members of the family to be paid caregivers, enabling extra folks to stay of their properties as they age, and completely growing wages for all HCBS suppliers.
There may be bipartisan curiosity in enhancing the coordination for Medicare-Medicaid enrollees (also called “twin eligibles”). People who find themselves enrolled in each Medicare and Medicaid are inclined to have vital well being and purposeful wants and better well being care spending than folks with solely Medicare or Medicaid. Policymakers have expressed curiosity in enhancing the coordination between Medicare and Medicaid with the objectives of improved well being outcomes and, probably, decreased well being care spending. Most just lately, a bipartisan group of senators launched a request for info, soliciting enter from sufferers, suppliers, payors, and different stakeholders.
What to Watch:
- How will the ultimate eligibility and enrollment rule improve enrollment for seniors and other people with disabilities?
- Will nursing facility residents and employees be at elevated danger of loss of life because the virus evolves and immunity wanes amongst people who find themselves vaccinated however not updated? What efforts will emerge to enhance charges of booster take-up?
- How will the tip of ARPA funding and PHE authorities have an effect on entry to HCBS?
- Will bipartisan curiosity in enhancing the coordination between Medicare and Medicaid lead to new laws addressing Medicare-Medicare enrollees and their entry to care?
