The Centers for Medicare & Medicaid Services (CMS) released updated State Health Official (SHO) Letter and Frequently Asked Questions (FAQs) guidance that replace the previously issued SHO #23-004 and FAQs on the requirement that states provide 12 months of continuous eligibility (CE) for children under the age of 19 in Medicaid and the Children’s Health Insurance Program (CHIP). The letter and FAQs provide guidance and answer questions about the requirement that was effective January 1, 2024.
Abbreviated Overview of Key Changes to Medicaid and CHIP for Children
As of January 1, 2024, all states (including U.S. territories) are required to offer 12 months of continuous, uninterrupted coverage for children under 19 enrolled in Medicaid or CHIP, regardless of changes in family circumstances. This policy is aimed at preventing gaps in healthcare coverage and improving health outcomes for children.
Key Benefits of Continuous Eligibility (CE)
For Families:
- Stable Coverage: Children remain covered for 12 months, even if a family’s income or situation changes.
- Health Access: Reduces disruptions in care, ensuring kids can access necessary preventive services (e.g., dental, mental health).
- Financial Relief: Preventive care is cheaper than emergency care, reducing the financial burden on families.
For States:
- Reduced Administrative Work: States will have fewer eligibility checks and renewals, streamlining the process.
- Lower Disenrollment Rates: CE reduces the churn rate (the number of children who are disenrolled and then reenrolled), which improves state efficiency and reduces costs.
- Promoting Health Equity: The policy supports consistent access to care, particularly for low-income and marginalized families.
Key Changes to Medicaid and CHIP Coverage Rules
- 12-Month Coverage Guarantee:
- All children under 19 in Medicaid and CHIP must receive 12 months of uninterrupted coverage, even if the family’s situation changes.
- Coverage cannot be interrupted due to things like missed premiums (CHIP) or household changes, with a few exceptions (listed below).
- When Can Coverage End?
- The child turns 19.
- The child moves out of the state.
- The family voluntarily discontinues coverage.
- The child was enrolled by mistake or due to fraud or error.
- The child has passed away.
- Switching Between Programs:
- If a child in CHIP qualifies for Medicaid during the 12-month period, they can either:
- Continue CHIP coverage for the rest of the 12 months.
- Start a new 12-month Medicaid period.
- Children moving from Medicaid to CHIP cannot switch programs during the coverage period.
- If a child in CHIP qualifies for Medicaid during the 12-month period, they can either:
- Premium Payments:
- CHIP enrollees cannot be disenrolled due to nonpayment of premiums during the 12-month coverage period.
- States can still require initial payments to enroll and collect past-due premiums.
- Who Is Covered?
- All children under 19 in Medicaid or CHIP are entitled to 12 months of coverage, including those covered under state waivers or demonstration programs.
- This does not apply to children in emergency Medicaid or other short-term programs.
- When Does Coverage Start?
- For new applicants, the 12-month coverage begins either on the application date or the first day of the month in which the application is submitted.
Exceptions and Special Cases
- Coverage for Incarcerated Children (Effective January 2025):
- Children who become incarcerated will maintain eligibility during the CE period, though coverage may be suspended while incarcerated and reinstated upon release.
- Pregnancy and Postpartum Care (FCEP):
- States may provide pregnancy-related benefits through CHIP for individuals ineligible for Medicaid.
- Postpartum care may continue under CHIP or Medicaid, depending on the coverage type and eligibility.
Important Details Regarding Continuous Eligibility (CE) Implementation
- State Plans:
- States must adjust their Medicaid and CHIP plans to align with these new requirements. The option exists to extend CE to adults in some cases.
- Impact of COVID-19:
- The effectiveness of CE was highlighted during the COVID-19 public health emergency, where CE successfully prevented coverage gaps, maintained access to healthcare, and reduced the uninsured rate among children.
- Administrative Efficiencies:
- CE reduces administrative burdens for states by eliminating the need for repeated eligibility reviews and renewals, thereby lowering costs and improving overall efficiency.
- Tracking Eligibility:
- States must track the date when a child becomes eligible and ensure they stay covered for the full 12-month period.
- States are encouraged to ensure that new information about eligibility is handled efficiently without causing disruption in coverage during the CE period.
Why Does This Matter?
- Health Equity: CE ensures that children, especially those from low-income families or marginalized groups, can continue to receive healthcare without the worry of losing coverage due to life changes.
- Cost Savings: Preventive care is more cost-effective than emergency care, saving families and states money in the long term.
- Improved Health Outcomes: With stable, continuous coverage, children can access necessary healthcare, improving overall health outcomes.
In summary, these changes to Medicaid and CHIP rules ensure children under 19 will receive uninterrupted healthcare coverage for 12 months, no matter how their family’s circumstances change, which will improve access to care and reduce healthcare inequities.
For more information, visit: https://www.medicaid.gov/federal-policy-guidance/downloads/sho25001.pdf