Secrets to a Successful Unwinding: Actions State-Based Marketplaces and Insurance Departments Can Take to Improve Coverage Transitions
Sabrina Corlette, Georgetown’s Center on Health Insurance Reforms, Jason Levitis, Urban Institute, and Tara Straw, Manatt Health
The long-expected return to Medicaid eligibility re-determinations and renewals, referred to as the “Medicaid unwinding,” has begun. Over the next 14 months, Medicaid agencies must assess the eligibility of over 90 million enrollees, roughly 18 million of whom will be terminated from Medicaid or the Children’s Health Insurance Program (CHIP). A good many of these individuals will be eligible for either employer-sponsored insurance or a subsidized plan on the health insurance Marketplaces.
This expert perspective provides a checklist of actions state-based marketplaces (SBMs) and state insurance departments (DOIs) can take, if they haven’t already, to reduce gaps in coverage and minimize disruptions in care. Many are designed to be temporary, and will be critical to helping people navigate an unprecedented period of disruption. Other actions involve policies or operational improvements that could reap long-term benefits by mitigating risks inherent in Medicaid-Marketplace “churn.”
This checklist draws from several previous State Health and Value Strategies publications, which discuss these strategies in greater detail.
Temporary Actions to Ease Disruption Due to Unwinding
SBMs and DOIs can implement several temporary policy or operational changes that are targeted to reduce the disruptions caused by the need to manage an unprecedented volume of people undergoing a coverage transition. Many of these policies or changes could be relaxed or rolled back, as Medicaid renewals return to their pre-pandemic cadence.
For State-Based Marketplaces:
- Extend deadlines for consumers losing Medicaid to enroll in Marketplace coverage. The traditional 60-day deadline tied to the loss-of-coverage special enrollment period (SEP) may not provide enough time for consumers losing Medicaid to enroll in Marketplace coverage, especially if they miss the redetermination notice from their Medicaid agency or face other administrative delays. In light of this issue, CMS recently announced an “Unwinding SEP” for consumers eligible for coverage on HealthCare.gov. This SEP allows people who attest to losing Medicaid between March 31, 2023 and July 31, 2024 to enroll. SBMs can provide their own extended SEP to mitigate the risk of consumers missing Marketplace enrollment deadlines and becoming uninsured.
- Ensure consumers losing Medicaid are aware that their families may be newly eligible for financial assistance on the Marketplace due to the family glitch fix. Navigators, assisters, and brokers should be prepared to help families understand their coverage options in light of the policy change to address the family glitch. SBMs should also update their online materials, as HealthCare.gov did, including explainers and employer coverage tools to collect information about premium costs of family coverage.
- Coordinate with state Medicaid agencies to sequence redeterminations to maximize successful transitions to Marketplace coverage. For example, consumers that are likely eligible for subsidized Marketplace coverage could be redetermined earlier in a calendar year to help them avoid higher deductibles for part-year coverage as well as alleviate the need for consumers to re-enroll in Marketplace coverage for the following calendar year shortly after their initial enrollment. In addition, families who are likely to be split between Marketplace coverage and Medicaid or CHIP could be redetermined around the end of the calendar year so that the family’s future annual Medicaid and CHIP redeterminations align with the Marketplace enrollment cycle. (https://www.phillipscorp.com)
- Develop and test processes for collecting and reporting required data. The Consolidated Appropriations Act of 2023 (CAA) includes requirements that SBMs report the following data to the Centers for Medicare & Medicaid Services (CMS):
- For SBMs with non-integrated eligibility systems: Number of individuals received via account transfer, number determined eligible for a qualified health plan (QHP) [or Basic Health Program (BHP), if applicable], and, of those determined eligible, the number that selected a QHP or enrolled in the BHP.
- For SBMs with integrated eligibility systems: Number of individuals determined eligible for a QHP or BHP and, of those determined eligible, the number who selected a QHP or enrolled in the BHP.
These data will not only be critical for compliance under the Consolidated Appropriations Act, 2023 (CAA), but also for communicating with state-level policymakers, the media, and other stakeholders about the SBM’s unwinding efforts. As such, considering how to frame and communicate this data, as well as progress towards key goals, will be critical.
For Departments of Insurance:
- Monitor the financial stability of insurers—particularly those offering low-cost plans—who may be facing a substantial increase in mid-year enrollment. As eligible consumers transition from Medicaid to Marketplace plans, there is potential for adverse selection as the population with the highest need for healthcare services may be motivated to complete their Marketplace application quickly. State regulators should ensure insurers have sufficient capital to absorb this enrollment.
- Make sure plans with narrow provider networks stay in compliance with network adequacy standards given a potential enrollment influx. State regulators should work with Marketplace officials to review estimates of plans’ maximum enrollment capacity, in order to mitigate risk of a plan reaching its capacity limit and threatening enrollee access to care. If enrollees are struggling to access in-network care due to inadequate provider networks, regulators could require plans to allow enrollees to access out-of-network care at in-network cost-sharing rates.
- Protect consumers from discriminatory or deceptive plan marketing tactics. State regulators can remind insurers that the Affordable Care Act (ACA) prohibits them from discouraging enrollment based on an individual’s health status. Regulators should also be prepared to crack down on marketing tactics that attempt to steer consumers losing Medicaid into non-ACA compliant plans. To support a robust consumer assistance workforce during this period, regulators can also require insurers to adjust their broker commission schedules such that brokers are adequately compensated for mediating coverage transitions between Medicaid and the Marketplace.
Actions to Ease Unwinding That Could Reap Long-Term Benefits
“Churn” occurs when people lose Medicaid and then re-enroll at a later date. These individuals experience gaps in insurance coverage if they do not transition to a Marketplace plan or employer-based insurance. Churn particularly affects low-income people and can lead to coverage loss as well as delayed or forgone care. For states, it results in higher administrative costs, less predictable state expenditures, and higher healthcare costs due to pent-up demand for healthcare services. The unwinding may be an “ill wind,” but it could blow some good by prompting SBMs and DOIs to adopt policies or practices that will help mitigate the longer-term effects of churn.
For State-Based Marketplaces:
- Facilitate enrollment for consumers moving from Medicaid to Marketplace coverage. SBMs should consider using eligibility information from their state Medicaid agency and other sources to simplify the enrollment process for consumers transitioning to the Marketplace. SBMs with eligibility systems separate from their Medicaid programs’ can use information received through the account transfer process to prepare a Marketplace account and prepopulate the application. States with integrated eligibility systems may be able to go even further, for example calculating eligibility or suggesting a plan.
- Adjust batch re-enrollment processes to account for redeterminations. Since the Marketplace batch re-enrollment process can miss enrollees who were not enrolled in key autumn months, SBMs can re-run their auto-enrollment processes based on year-end enrollment to ensure they pick up consumers who enrolled later in the year after losing Medicaid coverage.
- Ease enrollment by limiting data matching issues. SBMs can address data matching issues (DMIs) by expanding the income inconsistency threshold used to trigger DMIs, accepting verbal attestations of household income to resolve DMIs, and extending DMI resolution deadlines.
- Minimize coverage gaps between Medicaid and the Marketplace. For example, SBMs could require carriers to make Marketplace coverage retroactive to the date an individual was disenrolled from Medicaid to help consumers avoid coverage gaps. They can also ensure that Marketplace coverage effectuates at the start of the month after a consumer loses Medicaid, as HealthCare.gov does, by opting not to delay enrollment for applications submitted in the second half of a month.
- Help encourage enrollment in employer-sponsored insurance (ESI) for consumers who are ineligible for financial assistance on the Marketplace because they have an affordable ESI offer. Instead of simply denying a consumer’s application for financial assistance, SBMs can direct consumers to reach out to their employers within 60 days of losing Medicaid.
- Target educational materials and assistance to consumers losing Medicaid who may be unfamiliar with Marketplace coverage. Given that many individuals who have been enrolled in Medicaid for multiple years may be unfamiliar with important elements of Marketplace coverage, SBMs can update their educational materials to clearly explain premiums, cost-sharing, benefits, and provider networks that new enrollees will interact with on the Marketplace.
- Support continuity of care to help ensure consumers transitioning to a Marketplace plan can access necessary healthcare services. SBMs can employ strategies to support continuity of care, including using claims data from their Medicaid agency to “map” transitioning individuals to a Marketplace plan that includes the providers that they use regularly and provide targeted enrollment guidance based on provider network access. In addition, if a transitioning enrollee does end up in a plan with an inadequate network, SBMs could offer a SEP to switch to a new plan.
For Departments of Insurance:
- Expand continuity of care protections. The federal government and many states have “continuity of care” laws in place that require insurers to cover services as if they are in-network for certain enrollees who switch to another form of coverage and subsequently lose access to critical providers. Twelve states and D.C. require insurers to provide the same protection when an enrollee is switching from Medicaid to a new health plan. State insurance regulators could consider expanding their current continuity of care protections to ensure that people who are disenrolled from Medicaid and in the middle of treatment do not immediately lose access to in-network providers they rely on. State regulators can also examine their authority to help transitioning consumers maintain access to prescription drugs and other healthcare services by requiring Marketplace plans to honor prior authorizations, formulary exceptions, and/or step therapy requirements granted by a new enrollee’s prior Medicaid plan.
- Help ensure consumers can meaningfully use their Marketplace coverage once they enroll. Individuals who lose Medicaid and enroll in Marketplace coverage in the middle or late in the plan year will face an annual deductible and out-of-pocket maximum that is not prorated to reflect the months they are covered. State regulators could work with their insurers to consider options for prorating deductibles and out-of-pocket maximums for new enrollees dependent on the month when they enroll in Marketplace coverage.
The authors thanks Emma Walsh-Alker for providing research support for this article.