Medicaid Enrollees Aren’t Waste: Halting the Eligibility and Enrollment Rule Will Steal Health Care from Eligible People

Medicaid Enrollees Aren’t Waste: Halting the Eligibility and Enrollment Rule Will Steal Health Care from Eligible People

The House Republican reconciliation bill proposal would slash at least $715 billion from Medicaid over the next decade. One significant piece of the proposal, with grave ramifications, is to impose a moratorium on the implementation, administration, and enforcement of the Eligibility and Enrollment Rule (as well as rules governing the Medicare Savings Program and nursing home staffing levels). The rule simplifies and improves eligibility and enrollment procedures for Medicaid and the Children’s Health Insurance Program (CHIP). The regulations became effective on June 3, 2024, and states across the country have already started implementing parts of the rule. If implementation of the Eligibility and Enrollment Rule is halted, vulnerable populations will be harmed.

Older adults and people with disabilities will lose access to health care

The Affordable Care Act established a simplified and streamlined system for Medicaid enrollments and renewals. But, until the adoption of the 2024 Eligibility and Enrollment Rule, it only benefited MAGI-eligible applicants and enrollees. “Non-MAGI” applicants and enrollees—a group including older adults, blind individuals and individuals with other disabilities, and children and youth receiving federal foster care assistance—were left out of the ACA’s simplified enrollment scheme.

Due to the Eligibility and Enrollment Rule, states may no longer enforce the burdensome eligibility and enrollment requirements against this population that had been permitted even after the enactment of the ACA. Non-MAGI eligibles are thus no longer more likely than other Medicaid applicants and enrollees to be denied or lose coverage despite being eligible for Medicaid.

If implementation of the Eligibility and Enrollment Rule is halted, states will backslide. They will again be able to erect pointless and damaging barriers to coverage. Such barriers unduly harm many groups, but most at risk are people over the age of 65, blind individuals and other individuals with disabilities, and vulnerable children. Individuals in these groups will again become more likely to lose or be denied coverage for procedural reasons.

People with disabilities will be at greater risk of institutionalization

The Eligibility and Enrollment Rule facilitates access to coverage for people with disabilities and chronic health conditions by allowing states the option to consider more types of projected expenses toward the required “medically needy” spend-down than were previously allowed. Eligible individuals can thus enroll in coverage sooner and stay on coverage, and they are more easily able to access services in the community and less likely to have to be institutionalized to receive care.

Halting implementation of the Eligibility and Enrollment Rule would restrict the projected expenses that states are allowed to count toward the spend-down amount. Individuals with disabilities would then be required to spend significantly more money to meet that amount. For example, an individual who was meeting their spend-down amount by including projected home- and community-based services expenses of $500 per month would now have to spend at least $500 extra per month ($1,000 total) on qualifying expenses before being eligible for Medicaid through the medically needy pathway.

Without the expanded options provided by the Eligibility and Enrollment Rule, individuals risk losing Medicaid eligibility repeatedly throughout the year as their expenses fluctuate. Churning, the process by which eligible individuals cycle on and off of Medicaid or CHIP coverage in a short time period, often due to procedural reasons, prevents people from being able to consistently access health care and results in worse health outcomes, especially for individuals with chronic health conditions and disabilities. The continued disruptions to coverage may substantially increase their risk of institutionalization.

Children will lose access to coverage that supports their health and development

Prior to the Eligibility and Enrollment Rule, states were able to impose barriers to their CHIP programs not allowed in any other insurance affordability program. For example, states could impose lockout periods for nonpayment of premiums, waiting periods, and annual and lifetime limits on CHIP services. The Eligibility and Enrollment Rule ended these methods of blocking access for eligible children.

Without the protections of the Eligibility and Enrollment Rule, states will very likely begin blocking enrollment of eligible children again. Nine states had waiting periods in their CHIP programs as recently as February 2024, 12 states had premium lockout periods as of October 2023, and 13 states still had lifetime limits on CHIP services at the time the rule was implemented.

Allowing states to again impose such barriers to access would harm the health and development of CHIP-eligible children. Consistent coverage in early life is linked to a reduction in chronic health conditions in adulthood. Conversely, a lack of access to health care in childhood is associated with worse health outcomes later in life, as well as more missed school, decreased educational attainment, and increased economic insecurity.

“Churn” on and off Medicaid and CHIP will increase, worsening health outcomes

The Eligibility and Enrollment Rule fosters continued enrollment for non-MAGI eligible individuals. Promoting continued enrollment reduces churn. Churn causes gaps in coverage, disrupted access to care, and is associated with worse health outcomes. For example, individuals who cycle on and off coverage are often unable to access preventive care, resulting in increased emergency room visits and inpatient hospital admissions. Without the protections in the Eligibility and Enrollment Rule, Medicaid and CHIP enrollees will likely experience disrupted care and worse health outcomes.

Conclusion

Blocking the improvements that the Eligibility and Enrollment Rule made to Medicaid and CHIP will harm all who participate in those programs. The Republican-led effort to halt implementation and oversight of the Eligibility and Enrollment Rule in the reconciliation bill weaponizes red tape to take away health care  from eligible people. Children, blind individuals and other individuals with disabilities, and older adults who currently rely on Medicaid and CHIP coverage will suffer.

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