COVID-19 and Health Care Transformation
June 2020

Atyya Chaudhry
Senior Program Manager

Prior to the COVID-19 pandemic, the U.S. uninsured rate was approximately 8.5 percent or about 27.5 million people. Since the COVID-19 outbreak was declared a national emergency on March 13, 2020,[1] an estimated 12.7 million workers have lost employer-provided health insurance.[2] Congress has passed legislation to address the health and economic impact of the pandemic. With this measure, states are able to quickly seek temporary COVID-19 related Medicaid waivers. Some states also implemented new insurance industry regulations in response to COVID with a few electing to open up their State Health Insurance Marketplaces to a special enrollment period (SEP) for the uninsured. The actions at the national and state level have implications for access to coverage and access to care for women, children, and families. 

I. Congressional Leglislation

Families First Coronavirus Response Act (FFCRA): Enacted on March 18, 2020, this legislation requires all private insurers, Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) to cover COVID-19 testing without cost-sharing. FFCRA also appropriated $1 billion for the Public Health and Social Services Emergency Fund to cover testing for uninsured individuals under state Medicaid plans. In addition, FFCRA also temporarily increases the Federal Medicaid Matching Rate (FMAP) by 6.2 percentage points for all states and territories. The increase is effective for the quarter beginning January 1, 2020. It will remain until the last day of the quarter in which the public health emergency ends. However, for states to quality for the FMAP bump, they must meet the following four maintenance-of-effort requirements: 

  • May not disenroll any individual who is enrolled in Medicaid as of March 18, 2020, or who is newly enrolled during the public health emergency 
  • May not add new restrictive eligibility criteria
  • Testing and treatment for COVID-19 must be covered without cost-sharing 
  • May not impose new or increased premiums.

The Medicaid disenrollment freeze is especially important for maternal and child health (MCH) populations to be able to maintain continuous coverage. As the law stipulates, pregnant women enrolled in Medicaid must continue receiving coverage beyond 60 days postpartum. The same rule applies now with the freeze.

The Coronavirus Aid, Relief and Economic Security Act (CARES): This relief bill requires all private plans to cover COVID-19 testing and future vaccines. The CARES Act also addresses telehealth. It states that no special approval from Centers for Medicare and Medicaid Services is necessary for state Medicaid programs to reimburse providers for telehealth services in the same manner or at the same rate that states pay for equivalent in-person services.

II. Medicaid Activity 

As the U.S. Secretary of Health and Human Services declared a public health emergency and the President declared a national emergency, Medicaid programs can quickly seek temporary COVID-19 related waivers to respond to the pandemic. The following state actions have been utilized:

  • Section 1135 Waivers. These waivers primarily focus on health care providers, conditions of participation, licensure requirements, and preapproval requirements.
  • Disaster-Relief State Plan Amendment (SPA). Based on the Section 1135 authorizations, CMS issued guidance to states to submit SPAs to revise their Medicaid programs without meeting public notice requirements. The temporary changes proposed through the SPA vary from state to state. Types of changes include:
    • Expanding coverage of testing for uninsured individuals
    • Accepting self-attestation for eligibility criteria
    • Applying less restrictive income levels
    • Allowing additional entities to determine presumptive eligibility for some populations
    • Providing up to 12 months of continuous eligibility for children up to age 19.
  • Emergency Section 1115 Waivers. CMS issued guidance to State Medicaid Directors that allowed a new COVID-19 public health emergency section 1115 demonstration waiver under Medicaid. The new opportunity allows states to request waivers to respond to the COVID-19 pandemic.

States are using the flexibility offered by the federal government during this pandemic in different ways. Some states are proposing to use their Medicaid program to provide temporary housing. Others are providing 12 months of continuous coverage for children and suspending premiums for children’s coverage during the national emergency. These resources from Families USA and Kaiser Family Foundation provide additional information on state Medicaid approaches to deal with COVID-19.

III. State-Level Health Policy 

Several states have implemented new insurance industry regulations in response to the pandemic. These policy actions include:

  • Waiving patient cost-sharing for COVID-19 treatment
  • Mandating access to early prescription refills for COVID-19 and other health conditions
  • Requiring insurers to cover the COVID-19 vaccination once that is available.

In addition, 11 states and the District of Columbia opened a SEP for their state-based marketplace. This SEP will allow individuals without insurance to enroll in health care coverage during this pandemic.

Although these health policy actions at the national and state levels were developed to respond to the current public health emergency, most of these actions are temporary. The COVID-19 pandemic has highlighted the stark reality of disparities in access to affordable health care coverage and services.

In conclusion, the patchwork activity at the national and state level underscore the need for universal access to affordable health care for all.