CMS extends unwinding flexibilities for states to protect Medicaid, CHIP coverage until 2025

The Centers for Medicare and Medicaid Services (CMS) has announced an extension of unwinding flexibilities for states to protect coverage for people and families enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). This extension will last until June 30, 2025, to support states in establishing and updating income and eligibility determination systems.

During the COVID-19 pandemic, states were required to keep people enrolled in Medicaid and CHIP in exchange for enhanced federal funding. As a result, many states adopted flexibilities to respond to the pandemic and comply with conditions for receiving increased federal funding.

However, as of April, 20.1 million people have been disenrolled from Medicaid since the unwinding of the continuous coverage provision began in April 2023. This represents 21% of individuals who had coverage during the COVID-19 public health emergency.

CMS-approved strategies to prevent inappropriate disenrollments will continue, and states will implement policy, systems, and operational fixes to address areas of noncompliance with federal renewal requirements identified during unwinding. Extending flexibilities to streamline renewals will enable states to shift limited resources to reduce processing time at application when needed.

The extension of unwinding-related waivers until June 2025 is the third waiver extension, with the initial deadline set for this June. This announcement comes as a response to the challenges faced by states during the unwinding process, including varying approaches to redetermination processes and concerns over Medicaid disenrollment impacting hospitals.

The impact of Medicaid disenrollment on hospitals, charity care, and bad debt claims is a looming concern, with patients less likely to seek care until severe sickness sends them to the emergency room. The extension of flexibilities aims to address these challenges and ensure that eligible individuals retain coverage under Medicaid and CHIP.