New CMS Guidance: 12 Months Of Continuous Enrollment For Children Enrolled In Medicaid And CHIP Beginning January 1, 2024

Introduction

Relying on an option established in 1997, 24 states currently provide one-year continuous enrollment (CE) to children in Medicaid or CHIP (or in both programs). Last year, Congress enacted Section 5112 of the Consolidated Appropriations Act, 2023 (CAA) requiring all states to adopt this policy effective January 1, 2024, and on September 29, the Centers for Medicare & Medicaid Services (CMS) released a State Health Official (SHO) letter providing guidance on the requirement. As described below, key topics addressed in the guidance include the specific eligibility groups subject to CE under the CAA, the limited exceptions under which CE may be discontinued prior to 12 months, the impact of CE on children in carceral settings, and implementation requirements for states.

Continuous Eligibility Requirements in the State Health Official Letter

Comparing the Consolidated Appropriations Act's Continuous Eligibility Mandate and the State Plan Continuous Enrollment Option

As noted, currently, states have the option to provide up to 12 months of CE for children under Medicaid or CHIP.¹ Under this state plan option, states may elect to cover children up to age 19, or a younger age, and to provide 12 months of CE or a shorter duration of coverage. Several states also provide CE to Medicaid or CHIP-enrolled children under Section 1115 waivers. Under the CAA, however, all states will be required to provide 12 months of CE for children enrolled in Medicaid or CHIP up to age 19, effective January 1, 2024. While the CAA requirements are similar to the parameters of the state plan option, the guidance points out important differences.

Covered Populations

The CAA specifies that CE must be provided to children under 19 who are enrolled under the state plan in a mandatory or optional Medicaid eligibility group described in section 1902(a)(10)(A) of the Social Security Act and all targeted low-income children enrolled in a separate CHIP under the state plan. The statutory reference includes almost all children served by Medicaid and CHIP. In the SHO letter, CMS provides further guidance on the specific populations of Medicaid and CHIP enrollees who must be provided CE under the CAA. This guidance is summarized in the table below:

Exceptions to the 12-Month Continuous Eligibility Period

CE is intended to stabilize coverage regardless of changes in circumstances (CICs) that might otherwise disrupt coverage over the 12-month period. In the SHO letter, CMS provides guidance to states on the limited exceptions to 12 months of CE (i.e., the circumstances in which CE must be discontinued—and additionally identifies the changes in circumstances that do not qualify as an exception to the requirement to provide 12 months of CE). This guidance is summarized in the table below:

CMS states in the SHO letter that it is still assessing how non-payment of premiums intersects with CE under the CAA and plans to issue separate guidance on this topic.⁵

In the SHO letter, CMS additionally reminds states that they must process CICs that may impact eligibility at the individual, rather than the household level. While a child's eligibility is protected by CE (unless the change implicates one of the exceptions to CE discussed above), states cannot delay in acting on CICs that may impact eligibility for adults in the household that are enrolled in Medicaid or CHIP.

Beginning of Continuous Eligibility for New Applicants and During Redeterminations

For new applicants for Medicaid and CHIP, states will determine the effective date of eligibility for CE as they do today for children determined newly eligible for Medicaid and CHIP. For Medicaid enrollees, states can either begin coverage on the date of application or the first day of the month when the application was submitted. For children who are being redetermined, the CE period begins on the effective date of the individual's renewal.

Intersection of Continuous Eligibility with Medicaid Unwinding

Both prior to and after January 1, states will still be in the process of unwinding the Medicaid continuous coverage requirement consistent with other provisions of the CAA (for more information on unwinding-related requirements in the CAA, see here). The SHO letter advises states that for children who have not had a determination or renewal of eligibility within the 12 months preceding January 1, 2024, and whose renewal during the unwinding period is conducted on or after that date, states should begin a new CE period when the renewal during the state's unwinding occurs, provided that the child is determined to be eligible at that time. If the child is ineligible when the state completes the renewal, coverage would end on the date the determination is finalized.

Considerations for Specific Populations in the State Health Official Letter

Incarceration

The SHO letter provides an overview of Medicaid and CHIP eligibility requirements and availability of federal financial participation (FFP) for youth incarcerated in a public institution.⁶ In Medicaid, incarceration is not a basis for termination of coverage, but states are limited to claiming Medicaid reimbursement for an incarcerated individual for inpatient care. The passage of the 2018 Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) prohibits the termination of "eligible juveniles when a child who has been enrolled in Medicaid becomes incarcerated.⁷ States have the option to either suspend eligibility⁸ or benefits⁹ of eligible youth for the duration of their incarceration.

Consistent with the provisions in the SUPPORT Act, the SHO provides that under the CAA CE provision, if a child becomes incarcerated during their CE period, they remain eligible for the remainder of the CE period, subject to the limitation on covered services. In CHIP, unlike Medicaid, incarceration status is an eligibility factor, and without CE, incarceration renders a child ineligible for CHIP. Before the SHO letter, CMS had not expressly addressed the interaction between CE and incarceration in CHIP. However, CMS notes that if a child who has been enrolled in CHIP is subsequently incarcerated, CE overrides the eligibility exclusion. The state may not terminate coverage due to incarceration and must provide all services covered under the CHIP state plan that are not otherwise provided by the carceral setting through the end of the CE period.¹⁰ CMS has determined, particularly given other changes in the CAA related to incarcerated juveniles (see section 5121 of the CAA), that states have the flexibility to provide full coverage or suspend benefits or eligibility (but not terminate eligibility) for CHIP-enrolled children in carceral settings who are still in their 12-month CE period. If a child's CE period expires when they are in a carceral setting, they would no longer be eligible for CHIP because of the eligibility exclusion.

From Conception-To-End-Of-Pregnancy Option

The SHO letter outlines that the existing FCEP option under CHIP enables states to provide pregnant individuals with coverage for prenatal care and other pregnancy-related benefits from conception to end of pregnancy if they are not eligible for Medicaid or CHIP.¹¹ States that have adopted the FCEP option must provide CE to eligible individuals, but the duration of the CE period varies by whether the state enrolls a pregnant individual into Emergency Medicaid or CHIP for the coverage of labor and delivery (see pages 12-14 in the SHO letter for more information).

The SHO letter also reminds states that they can provide postpartum care through a health services initiative (HSI), rather than using bundled payments to provide care under the FCEP option.¹²

State Plan Amendments

The SHO letter affirms that states that newly adopt CE for children in Medicaid and/or CHIP will need to submit a SPA (respective to each program). States that have already implemented CE are not required to submit a Medicaid and/or CHIP SPA unless the state's current policy:

• Only applies CE to a subset of children under age 19, such as targeting a specific age range; or
• Implements a CE period shorter than 12 months.^13,14,15

Section 1115 Demonstration Authority

The SHO letter highlights that some states have received approval to provide CE for children for more than a 12-month period, or multi-year CE, through section 1115 demonstration authority. CMS has approved demonstration authority in Oregon (multi-year CE for children until age six and two years CE for children and adults over age six; more information is available here), Washington (multi-year CE until age six), and Massachusetts (24 months of CE for adults and children experiencing homelessness).

The SHO letter also acknowledges that CE is available for adults under section 1115 waiver authority; currently New York, New Jersey, Oregon, Illinois and Massachusetts provide CE to some or all adults.

Conclusion

The expansion of CE to all children nationally underscores Congress' commitment to ensuring that eligible children enrolled in Medicaid and CHIP have uninterrupted coverage over the course of a year, helping children maintain access to the healthcare services they need to thrive. In anticipation of January 1, states should examine their current policies to ensure compliance with CMS guidance and reach out to CMS to discuss any issues. States that will newly adopt CE may leverage this guidance to inform their policy implementation process and will want to begin communicating with members, community-based organizations, and providers to prepare for the forthcoming change.

Footnotes

1. § 1902(e)(12) of the Social Security Act (SSA), 42 CFR § 435.926 (Medicaid); 42 CFR § 457.342 (CHIP).

2. In footnote 15 of the SHO letter, CMS clarifies that this includes children eligible under the mandatory group codified at § 435.121 for individuals age 65 or over or who have disabilities or blindness in section 209(b) states as well as children who are eligible under section 1902(e)(3) of the Act and § 435.225 (relating to individuals under age 19 who would be eligible for Medicaid if they were in a medical institution, commonly referred to as the "Katie Beckett" group). CMS explains that these groups are "covered" under Section 1902(A)(10)(a) because "Section 1902(f) generally requires that individuals eligible in a 209(b) state's mandatory eligibility group for individuals 65 years old or who have blindness or disabilities be considered eligible under section 1902(a)(10)(A) of the Act . . . [and] section 1902(e)(3) of the Act requires that Katie Beckett enrollees be treated as SSI beneficiaries."

3. Targeted low-income child is defined in Section 2110(b) of the Act and § 457.310.

4. The first three of these exceptions were established by CMS in implementation of the State Plan option for Medicaid CE for children [see 42 CFR § 435.926(d)] and CMS provides in the SHO that these exceptions will also apply in connection with mandatory CE under the CAA (for Medicaid and CHIP-enrolled children).

5. Under the state plan option to provide CE in CHIP, states have the flexibility to but are not required to elect to terminate CE based on nonpayment of premiums or enrollment fees. 42 CFR § 457.342(b).

6. FFP is limited to inpatient services that are furnished to the individual while admitted to a medical institution for at least a 24-hour inpatient stay. This policy does not apply to children who have attested to being a U.S. citizen or in a satisfactory immigration status, and who are receiving benefits during a reasonable opportunity period (ROP), if the state is unable to verify the child's status during the ROP.

7. An "eligible juvenile" is defined as an individual who is under 21 years of age or an individual eligible under the mandatory eligibility group for former foster care children who was determined eligible for Medicaid prior to becoming or while an inmate of a public institution.

8. Under an eligibility suspension, the individual's Medicaid eligibility is not terminated, but is effectively paused. Eligibility can be reinstated if the individual needs covered inpatient services. Depending on when the individual's last full determination was conducted (i.e., at application or most recent regular renewal), the state may need to conduct a renewal prior to reinstating eligibility. When eligibility is suspended, a state may, but is not required to, conduct regular annual renewals.

9. Under a benefits suspension, individuals who become incarcerated continue to be eligible for Medicaid, but coverage is limited only to inpatient services. When benefits are suspended, the state must complete regular annual renewals and redetermine eligibility when the incarcerated individual experiences a CIC that may impact their eligibility for the duration of the individual's incarceration.

10. This is because there is no limitation of FFP for CHIP-enrolled children in carceral settings the way that there is for Medicaid, and as a result, where CE overrides the eligibility exclusion, as CMS interprets it, full coverage would appear to be required.

11. 42 CFR § 457.10.

12. Medicaid-eligible infants whose birth was paid for through an HSI may receive CE for one year and mandatory Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefits. Additionally, by using an HSI for postpartum care, states can provide the same comprehensive postpartum coverage to all pregnant individuals across Medicaid and CHIP for up to 12 months, not just the postpartum services covered through a bundled payment.

13. Sections 1902(e)(12) and 2107(e)(1)(K) of the Act, as amended by the CAA, 2023.

14. States must submit CE-related SPAs for Medicaid through MACPro and CHIP SPAs through the Medicaid Model Data Lab (MMDL).

15. To have an effective date of January 1, 2024, states will need to submit their Medicaid SPA no later than March 31, 2024, in accordance with Medicaid regulations. For CHIP, to have an effective date of January 1, 2024, states must submit their SPA no later than the end of the state fiscal year in which January 1, 2024 falls.

Originally Published by Robert Wood Johnson Foundation's State Health and Value Strategies program

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