States Respond to COVID-19 Challenges but Also Take Advantage of New Opportunities to Address Long-Standing Issues: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2021 and 2022

Introduction

The COVID-19 pandemic and public health emergency (PHE) declaration dramatically impacted state Medicaid programs, requiring states to rapidly adapt to meet the changing needs of Medicaid enrollees and providers. Nationwide, Medicaid provided health insurance coverage to nearly one in five  Americans in 2020¹ and accounted for nearly one-sixth of all U.S. health care expenditures in 2019.² Total Medicaid/CHIP enrollment grew to 82.3 million in April 2021, an increase of 11.1 million (15.5%) from February 2020, right before the pandemic and when enrollment began to steadily increase.³

Beginning early in the pandemic, states and the federal government implemented numerous Medicaid emergency authorities to enhance state capacity to respond to the emerging public health and economic crises.⁴ In addition, Congress authorized changes to Medicaid through the Families First Coronavirus Response Act (FFCRA)⁵ and Coronavirus Aid, Relief, and Economic Security (CARES) Act,⁶ including a 6.2 percentage point increase in the federal Medicaid match rate (“FMAP”) (retroactive to January 1, 2020). This “enhanced FMAP” is available to states that meet “maintenance of eligibility” (MOE) conditions which ensure continued coverage for current enrollees as well as coverage of coronavirus testing and treatment.⁷ All of these changes (the emergency policy actions, the fiscal relief and the MOE) are tied to the duration of the PHE. The current PHE declaration expires on January 16, 2022,⁸ though the Biden Administration could renew the declaration again and has notified states that it will provide 60 days of notice prior to the declaration’s termination or expiration.⁹ The Biden Administration also recently updated previous state guidance regarding the end of the PHE and transition to normal operations,¹⁰ allowing states additional time to complete renewals and redeterminations once the PHE ends.¹¹

This report draws upon findings from the 21st annual budget survey of Medicaid officials in all 50 states and the District of Columbia conducted by KFF and Health Management Associates (HMA), in collaboration with the National Association of Medicaid Directors (NAMD). (Previous reports are archived here.¹²) This year’s KFF/HMA Medicaid budget survey was conducted via a survey sent to each state Medicaid director in June 2021 and then a follow-up telephone interview. Overall, 47 states responded in summer of 2021,¹³ although response rates for specific questions varied. The District of Columbia is counted as a state for the purposes of this report. Given differences in the financing structure of their programs, the U.S. territories were not included in this analysis. The survey instrument is included as an appendix to this report.

This report examines Medicaid policies in place or implemented in state fiscal year (FY) 2021, policy changes implemented at the beginning of FY 2022, and policy changes for which a definite decision has been made to implement in FY 2022 (which began for most states on July 1).¹⁴ We also examine state experiences with policies adopted in response to the COVID-19 pandemic. Policies adopted for the upcoming year are occasionally delayed or not implemented for reasons related to legal, fiscal, administrative, systems, or political considerations, or due to CMS approval delays. States completed this survey in mid-summer of 2021, following increased vaccination rates and declining COVID-19 cases but just prior to a new wave of COVID-19 infections, hospitalizations, and deaths driven by the highly contagious Delta variant. Key findings, along with state-by-state tables, are included in the following sections:

• Delivery Systems
• Benefits and Telehealth
• Social Determinants of Health (also includes information on health equity and COVID-19 vaccine uptake)
• Provider Rates and Taxes
• Pharmacy
• Challenges and Priorities in FY 2022 and Beyond Reported by Medicaid Directors