States Cannot Terminate Medicaid Benefits During the Coronavirus Pandemic

A provision in a recent coronavirus relief package prevents states from terminating Medicaid benefits during the pandemic.

The Families First Coronavirus Response Act (“CV Response Act”) was signed into law on March 18, 2020 and prevents states from terminating any Medicaid recipients who were enrolled in Medicaid on or after March 18, 2020, including in circumstances where there is a change that would normally cause their coverage to be terminated. Medicaid coverage for all recipients must continue through the end of the month during which the public health emergency declared by the Secretary of Health and Human Services for COVID-19 ends.

The state must make a good faith effort to contact recipients whose Medicaid benefits were terminated after March 18, 2020 and encourage him or her to reenroll. States are, however, able to terminate coverage for people who request to be terminated or who are no longer residents of that state.

The continuous coverage requirement does not apply to individuals who were determined to be presumptively eligible for benefits, but individuals who were determined ineligible before March 18, 2020 who continue to receive coverage while they appeal the decision are entitled to this continuous coverage.

It is important for the maximum number of people to maintain health coverage during this public health crisis for several reasons. First, it is vital to public health. People who do not have health insurance may delay testing and treatment for COVID-19 if they cannot afford the care they would need.  Providing Medicaid recipients with continuous coverage allows them to get the care and treatment they need if they become sick while freeing them from the paperwork that would otherwise be needed to prove eligibility, especially if their work situation has changed during this time.

Second, although most people with Medicaid coverage will likely remain eligible during an economic crisis, they are at particular risk of losing coverage due to wage checks against outdated data. Few people will likely experience income increases that would lead them to lose Medicaid eligibility right now, but many will either lose their jobs or lose a large percent of their usual income. The periodic data matches that states conduct against lagging earnings records may significantly overstate current income levels. If states continue to terminate coverage based on these checks or require people to submit extra paperwork to prove their income, many people will likely lose coverage just when they need it.

Finally, this new provision allows states to prioritize enrolling new applicants who become eligible after losing their job or having another change in circumstances. Applications are likely to surge in coming months as more people lose jobs and the health coverage that was tied to their jobs. It’s also important to keep in mind that many states have closed eligibility offices and many state caseworkers are unable work full time due to caregiving responsibilities with schools closed as well as other health concerns.