Under the Families First Coronavirus Response Act (Pub. L. 116-127), states that wish to take an enhanced 6.2 percent Federal Medical Assistance Percentage (FMAP) must sustain all Medicaid-enrolled individuals in the program for the length of the COVID-19 emergency regardless of changes in circumstances. This means that if a client had Medicaid on March 18, 2020, that client cannot be terminated for the length of the emergency unless he or she wishes to do so voluntarily or moves out of state.
All Medicaid recipients’ coverage must continue through the end of the month in which the public health emergency declared by the Secretary of Health and Human Services for COVID-19 ends. If the state terminated a Medicaid recipient’s benefits after March 18, 2020, the state must make a good faith effort to contact the recipient and encourage him or her to re-enroll.
Medicaid terminations can occur for a variety of reasons commonly known to NAELA members, including changes in resources (like selling a house and getting cash), changes in income (like getting a new pension from a deceased spouse), change in creditable insurance coverage (like getting Medicare for turning 65 in a Medicaid expansion state), transfers of exempt resources (giving your exempt house away) or failure to provide information to a Medicaid agency (information is usually requested on an annual basis or due to a change in circumstances).
Elder law attorneys must approach this new temporary reality carefully when advising clients. The expectation remains that once the COVID-19 emergency ends, there will be a renewed scrutiny of the prior period pursuant to pre-COVID statutes, rules, and regulations, especially if states face budgetary pressures. Transfer penalty periods that would have commenced sooner could still be imposed after the emergency ends. Trust accountings and supporting documentation for redeterminations should still be compiled and updated even if they are not submitted immediately to the reviewing agency. Medicaid estate recovery would also still apply in a situation where eligibility is ongoing despite the presence of resources that would usually be in excess of allowable levels.
There may be good reasons for a voluntary termination of Medicaid benefits. However, failing to apply the new termination rules during COVID-19 to clients and facilitating voluntary terminations based on the prior law when a termination does not have to take place could be viewed as poor legal advice.
States are putting out their own guidance on how this law should be implemented, so monitor your Medicaid state agency for guidance. To learn more about this on the federal level, visit this page
for answers to the Frequently Asked Questions.