The State of State Protections: Maintaining Access to Services After Transitioning from Medicaid

For the first time in almost three years, states will soon resume redetermining whether Medicaid beneficiaries are still eligible for the program. Since February 2020, enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) has grown by 19 million people. Under COVID-19 relief legislation, state Medicaid programs were given a boost in federal financing so long as they refrained from terminating coverage during the public health emergency. But recent legislation puts the gains in insurance coverage in jeopardy — starting April 1, 2023, states can once again terminate Medicaid and CHIP coverage for people they deem ineligible.

The U.S. Department of Health and Human Services estimates that 15 million people could lose their Medicaid and CHIP coverage under this new legislation. Of those, only about 2.7 million will be eligible for subsidized marketplace coverage and another 5 million for employer-sponsored insurance. Other studies have made similar projections.

As states prepare to resume Medicaid eligibility redeterminations, government officials are focused on strategies to promote continuity of coverage to minimize the number of people who become uninsured or face gaps in coverage. The federal Centers for Medicare and Medicaid Services has provided states with guidance on when and how to conduct redeterminations, and the federal health insurance marketplace has dramatically increased funding for consumer outreach and assistance. Several state-based marketplaces also are preparing innovative programs, such as autoenrolling people into health plans and premium assistance, to ease coverage transitions.

But continuity of coverage is only one piece of the puzzle — even those who successfully shift to another coverage option face the risk of disrupted care and loss of access to providers they were seeing under their Medicaid plans. Many of these people will be in the midst of treatment, pregnant, or have serious chronic conditions. It is, therefore, critically important for states to develop strategies to promote continuity of care.

Gaps in “Continuity of Care” Protections

Provisions in the federal No Surprises Act require group health plans and insurers to allow certain patients, for a specified period, to pay no more than in-network cost sharing for services from providers that leave their plan’s network. These “continuity of care” protections apply to patients with serious and complex conditions who are undergoing treatment, such as those who are pregnant, terminally ill, scheduled for nonelective surgery, or undergoing a course of institutionalized or inpatient care. The protection is available for up to 90 days or for the duration of the patient’s treatment. Twenty-nine states offer similar protections to enrollees who lose access to an in-network provider because the provider has left or been terminated from their health plan’s network.

While critical, the federal and most state continuity of care protections are limited, since they are triggered only after a provider leaves a plan network. These protections do not extend to scenarios in which patients lose access to providers they are receiving treatment from because patients enroll in new plans. This could occur if a patient loses eligibility for Medicaid and has to enroll in marketplace insurance, for instance. Currently, only 12 states and the District of Columbia extend their continuity of care protections to certain high-need patients as they transition from Medicaid to a new plan that does not include their treating providers.

Not all state protections are created equal — they vary in duration and in the enrollees or services covered. For example, only Delaware requires carriers to cover prescribed medications, and only California covers maternal mental health services for up to a year. Of the 12 states that extend their continuity of care protections to those transitioning from Medicaid to a marketplace plan, only three states (California, Delaware, and Maryland) require insurers to honor certain prior authorizations issued by a new enrollees’ former plan.

Looking Ahead

Extending continuity of care protections to people transitioning from Medicaid to private insurance is one step states and federal officials can take to preserve access to services. Other actions states could take to ease this transition include requiring private insurers to:

• pro-rate deductibles and the annual out-of-pocket maximum for midyear enrollees, and
• honor the prior authorization, step therapy (i.e., require a beneficiary to try a lower-cost drug before a more expensive one), and formulary exception decisions of an enrollee’s prior Medicaid plan.

These and other actions will be critical for ensuring uninterrupted care for those in treatment, pregnant, or managing a chronic illness as Medicaid redeterminations resume. If made permanent, continuity of care protections could reap long-term benefits, including by addressing the serious challenge of “churn” among low-income people between Medicaid and private coverage.