The Centers for Medicare & Medicaid Services (CMS) on April 2 published a final rule, “Streamlining Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes,” which aims to make it easier for eligible people to enroll in and retain their Medicaid, Children’s Health Insurance Program, and Basic Health Program coverage. This final rule, together with a separate rule finalized in September 2023, seeks to streamline eligibility and enrollment processes, reduce administrative burden for states and program beneficiaries, and increase enrollment and retention (continued coverage) of eligible individuals.
Although published in two parts, the provisions in both of these final rules emerged from a CMS 2022 proposed rule, issued in response to Executive Orders from President Biden directing the agency to strengthen access to affordable, quality health coverage.
The rules do not change eligibility requirements, but they will result in States making certain changes to their eligibility and enrollment systems. Examples of policy changes to be implemented under these rules include the following.
Medicare Savings Program
Application for and enrollment in Medicare Savings Program (MSP) coverage will be streamlined. The MSPs are eligibility groups through which Medicaid pays Medicare premiums and cost-sharing for Medicare beneficiaries who have limited incomes. The 2023 final rule will simplify the process of applying and enrolling by: 1) automatically enrolling certain individuals into the Qualified Medicare Beneficiary (QMB) group and; 2) better leveraging data Medicare Part D Low-Income Subsidy (LIS) data. The MSP and LIS programs have similar income and resource eligibility criteria.
Medicaid Eligibility and Enrollment
The April 2024 rule includes several provisions relating to individuals whose Medicaid eligibility is based on being 65 or older, having blindness, or having a disability.
For example, the final rule requires states to conduct renewals no more than once every 12 months with limited exceptions; use prepopulated renewal forms; provide a minimum 90-day reconsideration period after procedural termination for failure to return information needed to redetermine eligibility; limit requests for information about a change in circumstances to information on the change; and accept renewals through multiple modalities, including online, phone, mail, and in-person.
The rule also provides states with the option to use projected predictable medical expenses incurred by people living in the community for purposes of deducting these expenses from the applicant’s income when determining financial eligibility.
Under prior regulations, States have had the option to project certain predictable medical institution expenses (such as the monthly cost of nursing home care calculated at the Medicaid rate) when determining the income eligibility of an individual who will be required to meet a spenddown. In other words, a State may choose to determine that an individual will incur the expense and, in doing so, can establish that the individual is eligible for Medicaid and grant eligibility effective on the first day of the person’s budget period. For program integrity purposes, States reconcile projected amounts with the actual amounts incurred against the required spenddown at the end of the budget period.
However, States did not have the option to project expenses for individuals residing in the community, meaning that an individual must first incur and verify eligible expenses that meet the required income spenddown before becoming Medicaid eligible. This can result in the individual cycling on and off Medicaid, with eligibility starting at some point after each new budget period begins (such periods are between 1 and 6 months, at the State’s discretion), causing a gap in coverage for the individual.
Under the new final rule, States will have the option to project certain additional services that the State can determine with reasonable certainty will be constant and predictable – such as expenses for medical or remedial services identified in a Home and Community Based Services care plan or expenses for prescription drugs – when determining the income eligibility of an individual residing in the community (again, with back end reconciliation of projected and actual expenditures).
Next Steps
Policy and systems changes will not begin immediately, as the final rules provide states with compliance dates ranging from 12-36 months into the future. CMS notes that, as States submit proposed changes to their to their eligibility and enrollment systems and implement new functionality, the agency will provide technical assistance on the requirements, conduct ongoing reviews of both State policy and systems, and ensure that all proposed changes support more accurate and timely processing of eligibility determinations.
LeadingAge will continue to follow the implementation of these policies in the months ahead.
Additional information is available from these CMS Fact Sheets:
Older Americans Month 2024: Suggested Schedule
