The federal government recently issued a new rule to make it easier for millions of eligible U.S. residents to enroll in and retain their Medicaid, Children’s Health Insurance Program (CHIP), and Basic Health Program (BHP) coverage.

The Centers for Medicare & Medicaid Services (CMS) adopted the rule in response to President Biden’s January 2021 and April 2022 Executive Orders to strengthen Medicaid and increase access to affordable, quality health coverage by simplifying by the enrollment process and the process to maintain coverage.

Harris Beach’s New York Wills and Estates attorneys are following the changes closely. CMS created a fact sheet about the new rule that explains the changes. The rule seeks to simplify the process of applying and enrolling by:

  • Removing unnecessary barriers to enrollment. States are prohibited from requiring in-person interviews for those age 65 and older, or those living with blindness or disability. States also must provide a reasonable time period for applicants to return eligibility information and documentation.
  • Streamlining required eligibility information. States are required to use electronic data from other sources to determine income and assets. If information provided by an individual is reasonably compatible with information returned through an asset verification system, the state must determine eligibility based on that information and may not request further verification of assets from the individual.
  • Ending burdensome requirements. The rule eliminates the requirement to apply for other benefits as a condition of Medicaid eligibility.
  • Simplifying eligibility requirements. States are now allowed to use projected predictable medical expenses, such as home care and prescription drugs, to deduct these expenses from the applicant’s income when determining financial eligibility.

Retaining Enrollment in Federal Health Care Programs will be Easier

The rule also included a number of provisions to reduce the number of people who lose coverage and are forced to go through a re-enrollment process. For those over 65 or living with blindness or disability, states must:

  • Conduct renewals no more than once a year (with limited exceptions)
  • Use pre-populated renewal forms
  • Provide a minimum 90-day reconsideration period after loss of coverage for failing to return information needed to re-determine eligibility
  • Limit requests for information about a change in circumstances to information on the change
  • Accept renewals in multiple ways, including online, phone, mail and in-person.

The rule also:

  • Establishes a clear process to prevent termination for those who transition between Medicaid and CHIP when their income changes or when the beneficiary appears to be eligible for the other program
  • Provides specific guidelines for checking available data prior to terminating eligibility because a beneficiary cannot be reached due to returned mail
  • Uses certain types of available information to update addresses when beneficiaries move within the state.
  • Adheres to a minimum timeframe of at least 15 days for individuals to return information for an initial application, and at least 30 days to provide documentation for retaining enrollment

Removing Barriers for Children to Enroll in CHIP and Medicaid

The rule also removes barriers to CHIP enrollment that don’t apply to other insurance affordability programs by:

  • Allowing CHIP beneficiaries to re-enroll without a lock-out period for failing to pay a CHIP premium
  • Removing the state option to require a waiting period prior to CHIP enrollment as a substitution for coverage prevention strategy
  • Prohibiting annual and lifetime limits on CHIP benefits

This rule also establishes a specific pathway to Medicaid eligibility for children with disabilities by finalizing an optional eligibility group for individuals under age 21 whose eligibility is excepted from use of the MAGI-based methodology or whose MAGI-based eligibility is not otherwise described, and for which such coverage is not already permitted in regulation.

Improving Record Keeping for Federal Health Care Programs

Finally, the rule updates outdated recordkeeping regulations for state Medicaid and CHIP agencies. The rules were last updated in 1986 and regulators believe updating is critical to identifying errors and eliminating errors and improper payments. The rule:

  • Defines the types of eligibility determination information/documentation required to be maintained.
  • Requires retention of Medicaid/CHIP records and documentation for a minimum of three years unless the individual has an estate subject to recoveries.
  • Requires storage of records in electronic format.
  • Requires states to make records available within 30 days upon request barring circumstances beyond the state’s control.
  • Establishes minimum time standards for states to determine eligibility at renewal and following a change in circumstances.

Harris Beach’s Wills, Trusts and Estates lawyers are closely following this and related issues. If you have questions, please reach out to New York estate planning attorney Lisa M. Powers at (585) 419-8869 and lpowers@harrisbeach.com, or to the Harris Beach attorney with whom you most frequently work.

This alert is not a substitute for advice of counsel on specific legal issues.

Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as Washington D.C., New Haven, Connecticut and Newark, New Jersey.