On March 28, 2024, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), announced that it is extending the temporary special enrollment period (the Unwinding SEP) for prior beneficiaries of Medicaid and Medicaid-expansion Children’s Health Insurance Programs (CHIP) to enroll in the Health Insurance Marketplace (Marketplace). The Unwinding SEP was previously scheduled to terminate on July 31, 2024, but now the end date is extended to November 30, 2024. This 4-month extension will help millions maintain insurance coverage as they navigate their new post-pandemic eligibility statuses.
Additionally, on April 2, 2024, CMS released Part 2 of a complementary Final Rule on Streamlining the Medicaid, CHIP, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes. Whereas the Unwinding SEP extension helps ensure coverage continuity for those recently ineligible for Medicaid and CHIP, the Final Rule does the same for those who are still Medicaid or CHIP eligible. The Final Rule takes effect on June 3, 2024.
The COVID-19 Continuous Enrollment Requirement
Before the pandemic, state Medicaid agencies conducted yearly eligibility reviews of Medicaid and CHIP enrollees and were permitted to disenroll ineligible individuals. During the COVID-19 pandemic, in the spring of 2020, Congress enacted the Families First Coronavirus Response Act (FFCRA), which paused this eligibility review process and prohibited state Medicaid agencies from involuntarily disenrolling beneficiaries or transferring enrollees to a different coverage group that provides a more restrictive benefit package. Medicaid and Medicaid-expansion CHIP programs were required to maintain continuous enrollment for all beneficiaries through the duration of the COVID-19 public health emergency (PHE) in exchange for enhanced federal funding. This requirement protected coverage for beneficiaries whose circumstances changed such that they were no longer traditionally eligible for Medicaid or CHIP.
Mass Disenrollment and the Unwinding SEP
The PHE ended in the spring of 2023, and the 2023 Consolidated Appropriations Act ended the Medicaid and CHIP continuous enrollment requirement on March 31, 2023. The termination of this requirement effectively resumed the pre-pandemic status quo, permitting states to abruptly disenroll Medicare and CHIP beneficiaries. This mass-disenrollment event “present[ed] the single largest health coverage transition event since the first open enrollment period of the Affordable Care Act.” Approximately 15 million individuals (17.4% of all Medicaid and CHIP beneficiaries) became at risk for loss of health insurance coverage. Disenrollment from Medicaid and CHIP programs has been occurring since last March on a rolling basis, catching off-guard beneficiaries who had been previously guaranteed coverage for years and resulting in insurance coverage disruptions.
To mitigate these insurance coverage disruptions, in January of 2023, CMS created the Unwinding SEP, permitting recently disenrolled Medicaid and CHIP beneficiaries to enroll in a Marketplace plan outside of the normal open enrollment window. The Marketplace is a government-run portal where individuals who are not eligible for Medicaid or CHIP and who do not have employer-based insurance can compare and enroll in affordable insurance policies. The standard open enrollment period for the Marketplace is November 1 to December 15, so without this Unwinding SEP, individuals who were disenrolled from Medicaid and CHIP outside of this window would have lacked the opportunity to maintain affordable coverage in the period between their disenrollment and the standard Marketplace open enrollment period. The Unwinding SEP originally opened Marketplace enrollment from March 31, 2023 through July 31, 2024.
2024 Unwinding SEP Extension
Now, the Unwinding SEP has been extended through November 30, 2024. This extension will help those recently excluded from Medicaid or CHIP to promptly secure affordable, comprehensive coverage through the start of the next open enrollment period. Individuals who are recently non-Medicaid/CHIP-eligible but are Marketplace-eligible can apply for insurance anytime during the extended Unwinding SEP at HealthCare.gov.
Complementary Final Rule: Streamlining Medicaid and CHIP Enrollment and Renewal
Hand-in-hand with the Unwinding SEP extension, which is aimed at safeguarding coverage for those recently ineligible for Medicaid or CHIP, is the Final Rule, which establishes several measures to safeguard coverage for those still eligible for Medicaid or CHIP. The Final Rule endeavors to decrease the administrative barriers to Medicaid and CHIP enrollment and renewal, specifically by:
- Prohibiting states from requiring in-person interviews for those whose eligibility is based on having a disability or being at least 65 years old;
- Allowing flexibility for beneficiaries with a disability or who are 65+ to renew coverage via phone, mail, in-person, or online;
- Removing the option for states to impose a “Lock-Out Period,” which temporarily blocked families from re-enrolling after a missed CHIP premium payment;
- Requiring Medicaid agencies to check certain categories of available data prior to terminating enrollment when beneficiaries cannot be reached via mail; and
- Requiring Medicaid agencies to provide potential beneficiaries at least 15 calendar days to return supplemental information requests in connection with an application, and 30 calendar days to return information in connection with a renewal.
Conclusion
Both CMS’s extension of the Unwinding SEP and publication of the Final Rule expand upon its efforts over the past year to protect insurance coverage for millions during the post-PHE transition period. For more information about the Final Rule’s adjustments to the Medicaid and CHIP enrollment and retention processes, see the Final Rule Fact Sheet.