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Page 2 – Deputy Secretary Sally Kozak

The Commonwealth of Pennsylvania will provide continuous eligibility to these populations for the specified length of time: • Continuous eligibility for children up to age six through the end of the month of their sixth birthday, regardless of changes in circumstances that would otherwise cause a loss of eligibility. • 12 months of continuous eligibility for high-risk individuals (including children under age 19) who are released from a state correctional institution. The period of continuous eligibility shall begin at the date of their release and will extend through the end of the 12th month following release, regardless of changes in circumstances that would otherwise cause a loss of eligibility.

Continuous eligibility is intended to support consistent coverage and continuity of care by keeping children and high-risk formerly incarcerated beneficiaries enrolled, regardless of changes in circumstances that would otherwise cause a loss of eligibility or other changes that would affect eligibility, such as a change in income. Expanding continuous eligibility beyond what is allowable in the Medicaid state plan is likely to assist in promoting the objectives of Medicaid by minimizing coverage gaps and helping to maintain continuity of access to program benefits for these populations, thereby improving health outcomes, and reducing churn. In 2018, one in ten Medicaid/CHIP enrollees disenrolled and reenrolled in Medicaid/CHIP in under one year.0F1 Continuous eligibility also supports reducing administrative costs resulting from churn; estimates from 2015 show that the administrative cost of one instance of churn (disenrolling and reenrolling) for one individual ranges from $400-$600.1F2 Continuous coverage is also likely to be an important driver of reducing the rate of uninsured and underinsured individuals.2F3 To facilitate access to and continuity of care, and recognizing that beneficiaries may not be aware of their continued coverage3F4, the amendment requires that the state have procedures and processes in place to provide individuals who qualify for a continuous eligibility period that exceeds 12 months an annual reminder of continued eligibility.

Budget Neutrality4F5

CMS has long required, as a condition of demonstration approval, that demonstrations be “budget neutral,” meaning the federal costs of the state’s Medicaid program with the

1 Corallo B, Garfield R, Tolbert J, Rudowitz R. Medicaid enrollment churn and implications for continuous Coverage Policies | KFF. KFF. Published December 15, 2021. https://www.kff.org/medicaid/issue-brief/medicaid- enrollment-churn-and-implications-for-continuous-coverage-policies/ 2 Swartz K, Short PF, Graefe DR, Uberoi N. Reducing Medicaid churning: Extending eligibility for twelve months or to end of calendar year is most effective. Health Affairs. 2015;34(7):1180-1187. doi:10.1377/hlthaff.2014.1204 3 A September 2023 State Health Official letter provides background on the importance of continuous eligibility in preventing interruptions that impede access to health coverage to support better short- and long-term health outcomes, and describes policies related to implementing continuous eligibility under the Consolidated Appropriations Act, 2023 (CAA, 2023) amendments. 4 McIntyre A, Smith RB, Sommers BD. Survey-Reported Coverage in 2019-2022 and Implications for Unwinding Medicaid Continuous Eligibility. JAMA Health Forum. 2024;5(4):e240430. doi:10.1001/jamahealthforum.2024.0430; https://jamanetwork.com/journals/jama-health-forum/fullarticle/2817285. 5 For more information on CMS’s current approach to budget neutrality, see https://www.medicaid.gov/medicaid/section-1115-demonstrations/budget-neutrality/index.html