Payers and States Prepare for End of the Public Health Emergency

With the Omicron variant starting to recede and political pressure starting to build to end the Public Health Emergency (PHE), various sectors of healthcare are starting to prepare for the end of the emergency period. Currently slated to come to a close April 16, the PHE has been extended eight times since it was declared in January of 2020 and could very well be extended again for three months at a time. However, the end is in sight and the pressure is building. The implications to the larger economy and the healthcare system are significant. Payers will see a shift in their member mix due to Medicaid disenrollment, among other changes.

A feature of the PHE was to halt all Medicaid disenrollment, regardless of changes to member eligibility. Those covered by Medicaid who are no longer eligible due to changed circumstances stand to be disenrolled when the PHE expires. One estimate reckons 15 million people younger than 65 could lose coverage, even though some will become eligible at the same time for Exchange plans or other programs. However, the educational task to convey this is huge with this traditionally difficult-to-reach audience because of SDOH barriers. Many who qualify for Medicaid often fall off the rolls because they cannot or do not complete the renewal process. Changes of address, disability, illiteracy, language barriers and other challenges contribute to incomplete renewals.

The Centers for Medicare and Medicaid Services (CMS) has issued guidance for states on “unwinding” the requirements and sorting out who continues to be eligible among 76.7 million currently enrolled individuals – nearly one in four Americans. The federal money allotted to maintain continuous coverage is likely to run out before this task is completed, even with the current administration allowing states a year to finish redeterminations. States will be under significant budgetary pressure.

The industry will get 60 days’ notice before the PHE ends, according to the U.S. Department of Health and Human Services (HHS). The agency often waits until just a few days before the expiration date to extend the PHE, shortening the window for state agencies and others to notify beneficiaries that their coverage may end.

Medicaid disenrollment is just one challenge of many ahead, as grants to local governments, providers and other groups dry up. With an unprecedented worldwide pandemic in modern times, the after-effects are bound to be significant and long-lasting, but may reveal opportunities to improve the system.