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Our attorneys stay on top of changes in legislation, agency regulations, case law, and industry trends—then craft timely legal alerts to keep clients up to date on legal developments important to their business.

March 31, 2023

Unwinding the Protective Provisions Related to Medicaid Eligibility

Since the COVID-19 public health emergency (PHE) was declared in March 2020, special provisions have been in place to ensure that anyone receiving Medicaid benefits did not have their benefits eliminated or decreased. The Families First Coronavirus Response Act (FFCRA), signed on March 18, 2020, prohibited states from discontinuing or reducing Medicaid benefits to individuals receiving those benefits. During the PHE, individuals receiving Medicaid benefits had those benefits automatically extended on their annual renewal dates (known as “continuous coverage”). States were also prohibited from reducing any individual’s existing Medicaid benefits (known as “maintenance of effort”). The FFCRA provided for an increase in federal funding to states to help defray the costs of the continuous coverage and maintenance of effort protections. The FFCRA provided that these protective provisions would continue through the end of the PHE.

The Consolidated Appropriations Act (CAA), signed into law on December 29, 2022, established a time frame for the “unwinding” of these protective provisions. The CAA also unlinks the PHE from these protective provisions. This unwinding will begin on March 31, 2023, with the end of continuous coverage. The increased federal funding provided to states under the FFCRA will be phased out and fully eliminated by December 31, 2023.

States are required to begin issuing renewal notices (eligibility redetermination notices) for Medicaid renewals coming due in April 2023. States will have up to 14 months to initiate and complete all Medicaid redeterminations and renewals. Since March 2020, Medicaid recipients have had their Medicaid eligibility automatically renewed on their respective renewal dates. In April 2023, Medicaid recipients will begin to receive full “renewal packets” in advance of their annual renewal date, which they will need to complete and submit to demonstrate that they comply with all conditions of eligibility at their renewal date.

Another protective provision in effect during the PHE allowed new Medicaid applicants to “attest” to certain financial eligibility requirements, such as income and transfer of assets. After June 30, 2023, attestation will no longer be permitted. The asset verification system process will resume for new applications and for conversions effective July 1, 2023. Applicants will once again be required to furnish documentation to prove their financial eligibility for the Medicaid program.

The initial Medicaid benefit terminations for those determined to be ineligible or for those who fail to return their renewal packet will begin in July 2023. The PHE is currently scheduled to expire on May 11, 2023. Even if the PHE is extended, the CAA effectively unlinks these Medicaid protective provisions from the PHE, so any extension to the PHE will not affect these unwinding provisions.

Many Medicaid recipients have not returned a renewal packet in three years; many more applied for Medicaid benefits during the PHE and may never have had to do a full application or renewal. Barclay Damon’s Elder Law & Medicaid Planning Team can assist with this complicated process. As a part of the Medicaid application process, the attorneys at Barclay Damon review each client’s situation to develop an individualized strategic plan to preserve and protect assets to the greatest extent possible.

If you have any questions regarding the content of this alert, please contact Bridget Dehmler, associate, at bdehmler@barclaydamon.com, or another member of the firm’s Trusts & Estates Practice Area.
 

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