policy

Introduction

Medicaid was created in 1965 to provide health care to aged, blind, and disabled individuals as well as parents and children on public assistance. Today, Medicaid provides critical health care coverage and services to more than 82 million Americans.¹ In 2021, Medicaid covered one in six adults and eight in ten children in poverty.² The program covers more than 40 percent of all births and more than 60 percent of nursing home residents.³ Medicaid enrollees include working Americans: in 2021, more than 60 percent of adult Medicaid beneficiaries were working full- or part-time. Forty-five percent of working Medicaid beneficiaries work for small businesses with fewer than 50 employees.⁴ Medicaid coverage provides security for working Americans to help them stay healthy, so they can get or keep their jobs.

Within Medicaid, managed care plays a critical and ever-expanding role in how services are provided to the program’s enrollees. Between 2003-2020, the percent of Medicaid enrollees enrolled in managed care grew from 57 to 84 percent.⁵

As of 2021, capitated managed care accounted for more than half (56%) of all Medicaid spending.⁶ While states contract with a variety of types of managed care organizations (e.g., for-profit, private nonprofit and government-owned plans), Safety-Net Health Plans (SNHPs)⁷ enroll 40 percent of Medicaid managed care enrollees and, as such, play a critically important role in the Medicaid program as well as the Medicaid managed care delivery system.⁸

SNHPs, which often participate in Medicaid in just one state, have forged strong and lasting partnerships with their states, remaining in service to the Medicaid program in good times and bad.

Medicaid is constantly changing to meet the needs of enrollees, becoming more flexible and accountable to those it serves. As enrollment has grown, Medicaid has evolved to become an active purchaser, driving improvements in health care quality and delivery system transformation. Most recently, Medicaid has
recognized the importance of confronting health disparities and providing coordinated care focused on “whole person care approaches” that address an enrollee’s physical health, behavioral health, and health-related social needs (HSRN). SNHPs’ foundational relationships within their communities – with local businesses, community-based organizations (CBOs), social services agencies, and safety-net health care providers – have supported this evolution, promoting higher-quality coverage and care.

On the threshold of Medicaid’s 60th anniversary, we must recognize the program’s tremendous value to tens of millions of enrollees, to health care providers and innovators, and to the nation at large, and continue to support and protect Medicaid. Medicaid is an investment in America, making the U.S. safe, healthy, and secure. ACAP is pleased to share proposals with Congress and the Administration that will continue to strengthen the Medicaid program to make it work better for enrollees and improve the services provided by the Medicaid managed care organizations (MCOs).

 

Keeping the Medicaid Promise: Sustaining and Expanding Coverage

All stakeholders must work together to ensure that Medicaid operates efficiently, is appropriately resourced, and provides stable coverage for the people for whom it is a lifeline. Importantly, Medicaid MCOs coordinate care for their members and are held accountable for quality outcomes by the Centers for Medicare and Medicaid Services (CMS) and states.

To ensure Medicaid coverage is always available for beneficiaries who need it the most, ACAP recommends the proposals outlined below.

Ensuring Stable Coverage

During the pandemic, Congress enacted protections to ensure Medicaid enrollees would retain their coverage by temporarily halting the need to complete annual eligibility renewals. The Consolidated Appropriations Act, 2023 (CAA, 2023), passed as the pandemic ebbed, required states to restart eligibility redeterminations. The subsequent “unwinding” process has brought into stark relief the need for permanent renewal flexibilities, including “ex parte” renewals, which allowed states to streamline redeterminations by using existing data in lieu of a new set of paperwork to verify Medicaid eligibility.

CMS used its authority under the Social Security Act⁹ to provide additional, temporary flexibilities to states to maintain eligibility for Medicaid beneficiaries. Some of these flexibilities have been made permanent, but others are due to expire at the end of 2024. ACAP recommends CMS also make permanent the following flexibilities:

• Reinstating an individual’s eligibility back to their termination date. Individuals who lose their Medicaid coverage due to procedural issues should be reinstated retroactively as of their termination date if they are subsequently redetermined eligible during the 90-day reconsideration period. This strategy protects beneficiaries’ access to continuous coverage and ensures they do not lose access to needed care due to systemic issues out of their control. Further, this strategy reduces the burden on state and county eligibility workers by eliminating the need to verify eligibility during the retroactive eligibility period prior to the date or month in which the renewal form is returned.
• Reenrolling an individual into their prior MCO after a loss of Medicaid coverage. Members of a Medicaid MCO who lose Medicaid coverage and subsequently regain their coverage within 120 days should automatically be reenrolled in the same MCO. During the unwinding period, this strategy has protected beneficiaries from losing coverage due to administrative challenges and delays. Following the end of the unwinding period, some states will continue to be challenged to issue automatic renewals, in part, due to inaccessible or incomplete data or beneficiary information. By retaining this flexibility, states will be able to ensure continuity of care, reduce provider administrative burdens related to enrollment churn, and facilitate greater adherence to authorized treatment plans.

Another lesson that emerged from the pandemic was the value of texting as a medium for communicating with Medicaid enrollees. The Federal Communications Commission (FCC) recognized this when, in January 2023, it issued a ruling permitting Medicaid programs and their partner MCOs to send automated messages regarding eligibility redeterminations to their enrollees. The ruling was limited to texts about enrollment, but it allowed Medicaid programs and MCOs to reach people the way most people communicate today – through text messages, not “snail-mail.”

ACAP supports expanding the use of texting for issues beyond redeterminations: care coordination, care management and complex care management, information on beneficiary benefits, and updates about provider networks are all areas that could benefit from texting. ACAP specifically recommends:

• CMS and the FCC clarify and expand the scope of the allowable uses of texting and the need for beneficiaries to opt in to receiving texts. Given that much modern communication occurs electronically, CMS and the FCC should work together to issue guidance confirming that texting for the purpose of carrying out programs that are closely related to, and fall under, the enrollee’s Medicaid coverage is permissible and does not require the enrollee to opt in.
• CMS identify and disseminate best practices for the effective use of texting by states and MCOs. CMS should consult with states and other stakeholders to identify and share effective and efficient texting strategies. Areas of focus could include building trust between enrollees, state agencies and Medicaid managed care plans, educating enrollees about the full value of communicating via text, and helping consumers make informed decisions around opt-outs.

In addition to restarting the Medicaid eligibility redetermination process, the CAA, 2023 provides 12 months’ continuous eligibility in Medicaid and CHIP for children and postpartum individuals. States also are using Section 1115 waiver authority to provide multi-year continuous eligibility to children,¹⁰ and the Biden Administration included a state option for such a policy in its Fiscal Year 2025 Budget Proposal.¹¹ To build on these developments, ACAP urges Congress to pass the following proposals:

• Nationwide 12-month continuous eligibility for adults. While states cannot require income-eligible adults to renew their Medicaid coverage more than once per year, an adult could lose Medicaid coverage due to a “change in circumstance,” including a change in income. Providing 12 months’ continuous eligibility to all adults will reduce “churn,” stabilize coverage, and increase access to needed health care for these beneficiaries.

• Nationwide 12-month postpartum coverage. The CAA, 2023 makes permanent a state option to implement 12-month continuous eligibility for postpartum coverage. While nearly all states have adopted this option, several have not.   Enacting nationwide 12-month continuous eligibility for postpartum coverage will stabilize coverage and care for postpartum individuals and is an important tool in the effort to address our nation’s maternal mortality crisis.

• Nationwide multi-year continuous eligibility for children and young people. Providing continuous eligibility in Medicaid and CHIP from birth to age 6, then two-year continuous eligibility for children age 6 and older will build on the success of nationwide 12-month continuous eligibility for children passed in the CAA, 2023. This will further stabilize coverage, provide better access to critical early childhood health care services, and help ensure financial stability for families in all states.
• Nationwide provision of Medicaid services to eligible individuals 30 days before and 30 days after release from incarceration. Without a Medicaid waiver, Medicaid’s “inmate exclusion policy” limits care for justice-involved individuals to inpatient hospital services. This leads to gaps in coverage and access to health care, which may lead to recidivism,¹² and be particularly serious for formerly incarcerated individuals with mental health and substance use disorder needs. The CAA, 2023 requires states to provide certain services to incarcerated juveniles 30 days before and for 30 days following release beginning in 2025. In addition, states will have the option to provide services during the initial period an eligible juvenile is incarcerated. ACAP urges Congress to pass legislation to provide services to all eligible incarcerated adults during the 30-day pre-release period to smooth their transition back to the community and improve health outcomes.

 

Ensuring Stable Funding

Stabilizing funding for the Medicaid program is critical to ensuring that Medicaid coverage continues to be available to the many Americans who rely on the program for their health care. To this end, ACAP supports:

• Maintaining Medicaid’s historical financing model. Medicaid’s financing is structured as a partnership between states and the federal government. Every dollar a state spends on Medicaid is matched by the federal government based on a state-specific percentage known as the Federal Medical Assistance Percentage (FMAP). This allows states to cover every new individual found to be eligible for the program, without waiting lists or enrollment caps. Proposals to change the financing structure of Medicaid into a block grant or per capita allotment-based structure would undermine the federal and state partnership by providing a fixed amount of federal funding to the states, limiting the total funding available to provide needed coverage and services to eligible beneficiaries. This would place undue pressure on states that are already under significant budget and resource constraints. Retaining Medicaid’s federal and state partnership will ensure that Medicaid coverage remains available to everyone who needs it.

• Enacting a permanent countercyclical FMAP increase. During an economic downturn, state revenues fall just as rising unemployment and underemployment rates mean more Americans need Medicaid coverage. By passing legislation to allow for an increase in FMAP rates during times of economic downturn, Congress would provide sufficient financial support for Medicaid at the time when enrollees need it the most.

 

Keeping the Medicaid Promise: Providing Better Care

ACAP’s 82 SNHPs share a common mission to provide high-quality health care to their members, and SNHPs’ commitment to delivering quality health care to their members is reflected in their quality scores. In 2022, ACAP’s plans scored higher than non-ACAP plans on 118 out of 190 HEDIS measures submitted to the NCQA Quality Compass.¹³ Further, NCQA’s Health Plan Ratings 2023 counted 15 ACAP plans among the top performing Medicaid MCOs nationally, earning a rating of at least 4 out of 5.¹⁴

SNHPs have worked for decades to improve the health of the people they cover through whole person care approaches that address the social needs – in addition to health care needs – of members. More recently, Medicaid policy and payment authorities have evolved to accommodate this new concept of benefits that recognizes the importance of HSRN in ensuring beneficiaries’ health and wellness. To enable MCOs and providers to continue to provide care to beneficiaries that meets their needs and is delivered effectively and efficiently, ACAP supports the proposals discussed below.

To advance the work around health equity and support a broad range of services to beneficiaries, federal policies should support and expand access to HRSN services and support the underlying relationships between MCOs and the local CBOs that provide these services. To support whole-person health care approaches, ACAP recommends that federal policymakers:

• Continue to expand access to HRSN services through Medicaid funding. CMS has shown strong support for providing greater access to HRSN services by allowing states to treat these services as benefits and broadening access to more Medicaid enrollees. CMS should continue to provide detailed information about all financing options available to states (i.e., outside of the Medicaid 1115 waiver framework) to provide HRSN services and build HRSN infrastructure.

• Support more accurate medical loss ratio (MLR) reporting and capitation rates by providing explicit HRSN-related examples. To continue to grow the use of HRSN services, an understanding of financial support for these services and related flexibilities available to states and plans will be critical. CMS could issue rate-setting guidance to states on current flexibilities (e.g., provide a roadmap for how payments from managed care plans to CBOs to support HRSN-related implementation activities can be captured for rate-setting purposes), and future work in this area could include updating federal MLR regulations to more accurately capture HRSN-related costs.

• Allow states to test new approaches to financing HRSN services and infrastructure. Supporting the CBOs that provide HRSN services is an important consideration as states and MCOs continue to expand their use. CBOs providing these services may not traditionally have partnered with MCOs and may face challenges in doing so (e.g., CBOs may need support for billing an MCO for services rendered, negotiating a managed care contract, meeting reporting and data sharing requirements). CMS should work with states to test new financing mechanisms and explore how existing financing can be used to support CBOs.¹⁵

Effective communication between patients, plans and providers is essential to high-quality coverage and care. Within Medicaid, 16 percent of non-elderly adults in households with at least one Medicaid beneficiary had Limited English Proficiency (LEP) in 2021.¹⁶ To support better access to care for these individuals, ACAP recommends that Department of Health & Human Services (HHS):

• Develop a universal symbol for language assistance services. In 2024, HHS issued a Request for Information regarding the development of a universal symbol for language assistance services in health settings for individuals with LEP. ACAP supports the use of such a symbol and urges HHS to move forward with development as soon as possible. While federal law¹⁷ provides the right for individuals with LEP to receive language assistance services, many do not know how to request them. A universal graphic symbol would improve understanding about how to request these services by more clearly informing individuals about them, leading to better communication between individuals with LEP and their health care providers.¹⁸

The ability for plans to provide quality care to their members comes back to the need for appropriate funding for the Medicaid program, including adequate payments for providers. To safeguard MCOs’ ability to provide quality health care to Medicaid enrollees, ACAP recommends:

• Ensuring Medicaid managed care rates are actuarially sound. Rates that are actuarially sound mean MCOs will receive proper reimbursement for services provided and populations served. This encourages continued Medicaid participation by both MCOs and providers, improving continuity of coverage and access to care for Medicaid enrollees. Inadequate rates put MCOs in a no-win situation by forcing them either to reduce benefits or underpay providers, which can destabilize provider networks. When MCOs do not have adequate resources to pay providers appropriately, providers are less willing to contract with MCOs or may restrict the number of Medicaid patients for whom they provide care.

 

Keeping the Medicaid Promise: Improving Data Transparency and Clarity

Data transparency is important across the program to ensure Medicaid works optimally for the tens of millions of Americans it serves. To this end, the federal government, states, MCOs, and providers should work together to improve the quality and comprehensiveness of the many types of data needed to understand the individuals served by the program and the quality of care they receive. MCOs, including SNHPs, play an important role in Medicaid as data hubs, collecting a wide range of data about their members and contracted providers. ACAP supports greater data transparency, including the provisions discussed below:

• Stratify redetermination data. As required by the CAA, 2023, CMS implemented new data collection and monitoring requirements for states, as part of the unwinding, to bring greater transparency to the Medicaid eligibility and enrollment process, including collection of data on renewal rates. ACAP supports CMS’s recent action to extend reporting on disenrollments and renewal rates indefinitely and further recommends that CMS work with all states to report and publicly release these data stratified by race and ethnicity as well as for the following subpopulations:

• Children;
• Dually-eligible individuals;
• Pregnant and postpartum women;
• People who are aged, blind, or disabled;
• People who indicate their preferred language is not English; and
• Medicaid beneficiaries whose coverage has been reinstated after being previously terminated during the unwinding.

This additional information would allow for more precise tracking of the impacts of the redetermination process on vulnerable populations.

• Update data standards for collection and protection of demographic data. ACAP and our member SNHPs are committed to advancing health equity and improving demographic data collection in Medicaid. In 2024, the Biden Administration updated the Office of Management and Budget’s Statistical Policy Directive number 15, and ACAP supports making race and ethnicity data collection more granular to better reflect the current understanding of race and ethnicity, improve data analysis, and allow MCOs to better assess health disparities. The Administration should continue to work to update standards for demographic data collection as well as the protection and use of individuals’ demographic data. This will improve our national understanding of how Medicaid works, the people served by the program and ensure that health care services and other interventions can be appropriately deployed and targeted. While revising demographic data standards indicates respect for the identities of the people being “counted,” ACAP notes that it can be challenging to capture. For example, MCOs report challenges with capturing data on sexual orientation/gender identity (SOGI) and disability status, highlighting the need to build trust in how data will be used and protected.

• Strengthen Medicaid quality reporting for adults. While MCOs have been required for many years to report on a wide range of quality measures developed by independent agencies such as NCQA or the Agency for Healthcare Research and Quality, the Children’s Health Insurance Program Reauthorization Act of 2009 and the Patient Protection and Affordable Care Act of 2010 created the first comprehensive, national effort to measure the impact of Medicaid coverage on access to care and health outcomes for the tens of millions of individuals enrolled in the program. This included the development of a core set of pediatric and adult core measures. Until recently, state reporting on these measure sets was voluntary, and ACAP has long supported legislation to require mandatory reporting for the pediatric measure set and the adult behavioral health measures. In 2018, Congress passed both requirements, which took effect in 2024. ACAP urges Congress to pass additional legislation to require mandatory reporting of the remaining adult core measures, which include maternal and perinatal measures. Rather than mandate states or providers to achieve specific quality targets, ACAP recommends that states submit data to allow for comparisons of quality of care, including between managed care and fee-for-service coverage.

 

Conclusion

Medicaid provides physical and behavioral health care – and, increasingly, provides access to services to address HSRN – to millions of Americans and plays a critical role in America’s health care delivery system. Throughout its history, the Medicaid program has constantly evolved to meet the needs of its enrollees by driving innovation in quality of care and how services are provided. ACAP and its 82-member SNHPs are proud to support this important work and to help ensure Medicaid continues to thrive as the program looks ahead to its next 60 years.