Medicaid Unwinding: When Will Your Patients' Coverage Expire?

After a three-year suspension, states have finally received the signal from the Centers for Medicare & Medicaid Services (CMS) to restart the Medicaid renewal process. From April 1, 2023 to May 31, 2024, all current Medicaid enrollees must renew to continue their coverage.

If you aren’t yet familiar with the major changes happening to Medicaid this year, now is a good time to check out our introduction to the redetermination process here. Otherwise, it’s time to navigate the “unwinding” process. 

What is “unwinding?”

Prior to the COVID-19 pandemic, patients covered by Medicaid were required to renew their coverage on an annual basis to prove they still qualified for the program. If they did not initiate this re-enrollment process, they would lose coverage. This was suspended during the pandemic in favor of an auto-renewal system to ensure no one lost health insurance during the public health emergency (PHE).

As the public health emergency’s expiration approaches, CMS has announced an end to the auto-renewal system. States must go back to “business as usual,” working to re-enroll patients before they lose their coverage. This return to regular renewals has been dubbed the Medicaid “unwinding.” 

It’s a big deal in the American healthcare system, which has never seen such a large-scale disruption. Since the start of the COVID-19 pandemic three years ago, Medicaid has seen a 27% growth in enrollment. Patients who joined during this time have never experienced the renewal process, and likely will not know they have to renew at all, costing them their coverage. 

Federal health officials are working with states to avoid a devastating loss in coverage for many Americans. But as of writing, the United States Department of Health and Human Services (HHS) estimates 15 million people will lose their health insurance coverage during the unwinding process, which officially began April 1. 

Timeline of the unwinding process

CMS rules have provided a clear timeline of the unwinding process. While states were given permission to start the process by notifying and contacting patients at risk of losing coverage on February 1 of this year, they could not start renewals and disenrollments until April 1. 

For patients who enrolled in Medicaid during the PHE, renewals must be initiated by March 31 of next year and completed by May 31, 2024. Most states (43 out of 49 responses) have reported they do intend to take the full 12-14 months allotted for unwinding. But strategies for unwinding vary from state to state. 

Five states have already begun to disenroll Medicaid patients as of April 1: Arizona, Arkansas, Idaho, New Hampshire, and South Dakota. In May, 14 states will begin disenrollments, followed by 20 more (plus the District of Columbia) in June. 

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State-by-state strategies for unwinding

Medicaid is primarily governed by the states. While federal officials oversee the program, guidelines vary by state. Unwinding is no different. CMS released basic guidelines for unwinding and four different strategy options, but each state has the freedom to choose how they approach the process of returning to regular eligibility. CMS must approve each state’s plan.

The four strategy options are as follows: 

1. Time-based

With a time-based approach, the state will either prioritize renewing Medicaid accounts that have been due for renewal the longest (i.e. those that would have expired the fastest at the start of the PHE in March 2020) or, the state can choose to keep the renewal month the same, meaning accounts due for renewal in May 2020 would simply be moved to a scheduled May 2023 renewal. 

2. Population-based

With a population-based approach, the state will prioritize scanning populations that are likely no longer eligible for Medicaid coverage based on available data. This includes people who may have turned 65 during the PHE and aged out of Medicaid, people who have coverage elsewhere or those who reported an increase in income over the past three years. These patients will receive priority eligibility redeterminations so they can be quickly and easily disenrolled. 

3. Hybrid

A hybrid approach combines the first two approaches by prioritizing eligibility reviews on populations likely no longer eligible for Medicaid and applying a time-based approach to the remaining Medicaid population within the state. 

4. State developed 

If the first three approaches don’t resonate, states are free to create their own approach to unwinding. They are only required to remain within the anti-discrimination guidelines established by CMS.

Many states are also adopting singular policies to maintain coverage for vulnerable populations throughout the unwinding process. More than half of states have introduced policies to increase renewals completed by ex parte and many are enacting policies to help children, postpartum women and eligible adults retain coverage for 12 months to extend through the entire unwinding process. 

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What should I do next?

Healthcare finance professionals should know exactly what their state is doing and how they are handling the unwinding process. Knowing the different approaches outlined above can help determine which strategy your state has adopted. It’s equally important to know your state’s timeline on unwinding. 

You can find this information on your state’s official Medicaid website. The governing body for Medicaid varies by state, so if you’re unsure where to look, your best bet is to Google “[Your State] Medicaid unwinding” or simply “[Your State] Medicaid.” Many state Medicaid departments have an FAQ on the unwinding process easily accessible on their homepage. 

Throughout the unwinding process, education will be the most important tool in your toolbox and the best defense against surprises. Luckily, the tools and partnerships you need to navigate the coming months exist and are available. 

Office Ally has been operating in the insurance verification and Medicaid eligibility and enrollment space for more than 20 years. We’re proud to serve as a trustworthy source of information and customizable software solutions to help you come out of this transition on top. 

We’re here to help. Contact Office Ally today to connect with one of our experts for more information.

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