Continuous health insurance coverage produces a broad array of benefits across the health care sector for individuals, states, health plans, and providers. In particular, Medicaid continuous eligibility promotes health equity by limiting gaps in coverage for low-income children and adults who experience disproportionate rates of health disparities. Consistent access to health care, including management of chronic conditions and care coordination, improves health status and well-being and drives more efficient health care spending. Importantly, continuous eligibility mitigates the negative effects of income volatility that disproportionately impact low-income families and essential workers. By reducing the administrative costs associated with enrollees cycling on and off of Medicaid due to temporary fluctuations in income, states can dedicate more of the Medicaid dollar to pay for health care. Moreover, continuous eligibility is necessary to fully measure the quality of health care in Medicaid and the Children’s Health Insurance Program (CHIP), which also opens the door to improved accountability and oversight of insurers including Medicaid managed care plans. This brief provides an update on the current policy landscape and benefits of continuous eligibility. It describes administrative actions that promote continuity of coverage at renewal, and during the year between renewals. It also recommends policy strategies to advance continuous coverage in Medicaid such as: (1) guaranteeing full-year coverage for all children; (2) allowing states to provide multi-year continuous eligibility for children without a section 1115 waiver; (3) extending federal continuous eligibility requirements following pregnancy from 60 days to 12 months; and (4) creating a new state option to extend 12-month continuous eligibility to adults.
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