As 2023 kicks off, a variety of points are at play that would have an effect on protection and financing beneath Medicaid, the first program offering complete well being and long-term care protection to low-income Individuals. 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 anticipated 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 shall be revealed in Governors’ state of the state addresses and proposed budgets. Inside this context, this concern transient examines key points to observe in Medicaid in 2023.
Medicaid Protection and Financing
The Medicaid steady enrollment provision in place through the pandemic has elevated enrollment and diminished the uninsured price, 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 through the Public Well being Emergency (PHE). Largely on account 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 federal fiscal 12 months 2022, states obtained 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 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 individuals might lose Medicaid protection throughout unwinding and the way states handle the method might have an effect on how many individuals are capable of 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 finally 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 under poverty, making them ineligible for premium subsidies within the ACA Market. A KFF evaluation exhibits that each 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 last state legislative session. Notably, each state that has adopted growth since 2019 has finished so not by legislative or government processes, however on account of a profitable poll initiative. Most not too long ago, South Dakota turned the fortieth state to broaden 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 shouldn’t have poll initiative processes. North Carolina stands out as the state almost certainly to broaden Medicaid subsequent given how far efforts superior final 12 months, with lively efforts in Kansas and Wyoming as effectively.
Some states and the Administration are anticipated to proceed to implement incremental insurance policies to broaden 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. Underneath present legislation, 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 individuals 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 youngsters. As well as, Oregon obtained waiver approval to supply steady eligibility for youngsters from delivery to age 6 and a couple of years of steady eligibility for all enrollees ages 6 and up, together with adults; different states are looking for related waivers for multi-year steady eligibility. KFF evaluation exhibits that for youngsters, 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 elements 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 had been driving increased labor prices and stress from suppliers for price will increase. Many states use reimbursement methodologies for some supplier sorts, equivalent to nursing amenities, which will robotically alter for inflation. As well as, on the federal degree the Home of Representatives is prone to concentrate on measures to cut back the federal deficit and, whereas unlikely to move within the Senate, proposals to restrict federal spending for Medicaid may very well be debated once more in Congress.
What to Watch:
- What’s going to occur to Medicaid enrollment through the unwinding of the continual enrollment provision? How will modifications range throughout states? How many individuals shedding Medicaid protection will transition to different sources of insurance coverage just like the Inexpensive Care Act marketplaces, and what is 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 laws contribute to modifications in protection?
- How will broader financial elements, 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 had been enrolled in MCOs as of July 1, 2022. A number of states have not too long ago applied Medicaid managed care applications. Starting July 1, 2021, North Carolina applied its first MCO program, enrolling greater than 1.8 million Medicaid beneficiaries in MCOs as of December 2022. Missouri applied 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 range extensively 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” companies – 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 through the unwinding of the continual enrollment provision. The Administration is anticipated to launch revised laws about Medicaid managed care and assuring entry in Medicaid within the Spring of 2023.
In response to the pandemic, all states took motion to broaden protection and entry to telehealth in Medicaid, significantly for behavioral well being providers. Specifically, practically all states added or expanded audio-only telehealth protection. These coverage modifications contributed to excessive telehealth utilization by Medicaid enrollees through the pandemic, total and particularly for behavioral well being providers. The fast growth of Medicaid telehealth insurance policies and utilization has prompted state and federal questions concerning the high quality of providers delivered by way of telehealth. Most states have applied or are planning initiatives to evaluate telehealth high quality, although many states report ongoing issues and uncertainty over the best way to successfully consider high quality. States additionally report actions to handle different telehealth challenges, together with entry to expertise and broadband, program integrity, outreach and training, and fairness. Most states have or plan to undertake everlasting Medicaid telehealth expansions that can 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, significantly for audio-only telehealth.
Past telehealth, many states are taking steps to broaden entry to behavioral well being providers because the pandemic has heightened demand for these providers. 9 in ten Individuals imagine the nation is within the midst of a psychological well being disaster. Behavioral well being circumstances (i.e., psychological well being and substance use problems) are extra prevalent in Medicaid enrollees in comparison with individuals with different protection, with knowledge from 2020 displaying that roughly 39% of Medicaid enrollees had 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 broaden entry and funding for behavioral well being, equivalent to provisions to require steering on increasing Medicaid-covered psychological well being providers in colleges, broaden Licensed Neighborhood 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 would assist handle well being fairness embrace closing the “protection hole” for adults in non-expansion states; growing protection amongst these eligible however not enrolled; and increasing advantages equivalent 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 cut back racial well being disparities embrace outreach to underserved populations, growing cultural competency, and establishing departments and devoted workers positions centered on selling fairness. As well as, states have obtained or are looking for Part 1115 waivers that purpose to advance fairness.
States and the Administration are implementing methods to leverage Medicaid to handle social determinants of well being (SDOH) by managed care and Part 1115 waivers. The Biden Administration has inspired states to suggest waivers that broaden protection, scale back well being disparities, and/or advance “whole-person care,” together with by addressing health-related social wants (HRSN). Latest waivers accredited in 4 states (AR, AZ, MA, and OR) embrace HRSN providers to handle 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 managed care authority, the Facilities for Medicare and Medicaid Companies (CMS) not too long ago launched extra steering on the usage of in lieu of providers and settings in Medicaid managed care to cut back well being disparities and handle unmet HRSN (equivalent to housing instability and diet 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 businesses undertake, and the way will these coverage modifications be told by knowledge analyses, federal steering, and price considerations?
- Will the Administration launch new steering in 2023 to handle entry to care and what provisions shall be included within the anticipated entry and revised managed care laws?
- 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 Individuals Eligible for Medicaid by Age or Incapacity
The brand new proposed rule on eligibility and enrollment might enhance enrollment amongst all Medicaid eligibility teams, however particularly amongst seniors and folks with disabilities. A proposed rule designed to make it simpler for individuals to acquire and preserve protection in Medicaid and CHIP consists of provisions to simplify the enrollment and renewal processes for seniors and folks with disabilities by making use of lots of the ACA’s simplified eligibility processes for youngsters 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 likely one of the causes for the proposed modifications. CMS expects that the rule would enhance Medicaid enrollment by practically 3 million full-year equivalents, with seniors and folks with disabilities accounting for over half of that complete.
Workers and residents at long-term care amenities have been disproportionately affected by the pandemic. Over one-fifth of all deaths from COVID-19 had been amongst residents and workers in long-term care amenities as of June 12, 2022. Though preliminary vaccination charges had been excessive and the dying price amongst nursing facility residents and workers 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 workers had been up-to-date with their vaccinations, which can lead to increased dying 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 residence and neighborhood settings (HCBS). In a KFF survey of HCBS applications, practically all states reported that workforce shortages had been the primary impression of the COVID-19 pandemic on HCBS providers and 44 states reported that not less than one HCBS supplier completely closed. Just about all states elevated cost charges in response, however a few of these will increase are non permanent somewhat than everlasting. Many modifications to HCBS applications relied on non permanent funding by the ARPA or non permanent authorities obtainable through the PHE. Policymakers of each events have referred to as for extra and longer-term modifications to HCBS together with eliminating ready lists for providers, growing alternatives for members of the family to be paid caregivers, enabling extra individuals to reside of their properties as they age, and completely growing wages for all HCBS suppliers.
There’s bipartisan curiosity in bettering the coordination for Medicare-Medicaid enrollees (often known as “twin eligibles”). People who find themselves enrolled in each Medicare and Medicaid are likely to have important well being and useful wants and better well being care spending than individuals with solely Medicare or Medicaid. Policymakers have expressed curiosity in bettering the coordination between Medicare and Medicaid with the objectives of improved well being outcomes and, presumably, diminished well being care spending. Most not too long ago, 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 enhance enrollment for seniors and folks with disabilities?
- Will nursing facility residents and workers be at elevated danger of dying 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 bettering the coordination between Medicare and Medicaid lead to new laws addressing Medicare-Medicare enrollees and their entry to care?