Lessons From Unwinding Offer Opportunities to Streamline Medicaid, Improve Efficiency

Most states have reviewed the eligibility of their entire Medicaid caseloads following the end of the federal continuous coverage protection that paused terminations for three years, and it’s possible to look at the lessons from this “unwinding” process and glean lessons for the future.

More than 25 million people have lost Medicaid since unwinding began, about 69 percent of them for procedural reasons — not because they were determined ineligible, but because they or the state didn’t complete a step in the process or didn’t do so quickly enough.^[1] Many of these individuals re-enrolled after losing coverage (a phenomenon known as churn),^[2] which suggests that burdensome processes prevented them from renewing their coverage.^[3] The increase in application volume due to churn contributed to state backlogs and delays.^[4] Also, the added spotlight on the renewal process exposed many instances where state agencies were not in compliance with long-standing federal regulations, such as a requirement to allow enrollees to renew over the phone and online.

At the same time, the struggles of many enrollees during unwinding and many states’ efforts in response led to improvements in state processes that positively impacted enrollees’ renewal experiences as well as the accuracy of state eligibility determinations.^[5] This demonstrates that it is possible to create efficient and effective Medicaid eligibility systems that better recognize the realities of enrollees’ lives.

Now, Medicaid is under threat with new leadership in Washington. Republicans in Congress are considering huge cuts and other changes to the program that would shift costs to states, cause people to lose coverage, and erect new barriers that would make it harder for people to enroll and renew coverage.^[6] The lessons learned from unwinding point in a different direction. Policymakers and advocates should use these lessons to shape a better post-unwinding world, where states run Medicaid programs more efficiently and eligible people can more easily get and keep their coverage.

Unwinding Highlights Best Practices to Streamline Eligibility and Enrollment Processes

The unwinding process provided an unprecedented opportunity for state agencies, advocates, and federal policymakers to identify existing gaps in state Medicaid programs and led to experimentation to reduce burdens on enrollees and agencies alike. State agencies and advocates should build on these lessons and continue pushing for progress and improvement in each area, even if Congress or the Trump Administration changes requirements or enforcement practices. Below are some key lessons from the unwinding period that should inform the future of Medicaid enrollment practices.

Administrative burdens can be reduced. Excessive administrative burdens — such as requiring enrollees to fill out complex forms, collect documents to prove eligibility, and wait on the phone to speak to an eligibility worker — make it difficult for eligible people to keep their coverage.^[7] But many of these burdens are preventable, and some are inconsistent with longstanding federal regulations.^[8] Many states found that revised forms, better communication with enrollees, and increased reliance on data sources to verify eligibility led to significant improvements over the course of unwinding.

Data transparency is key to identifying and addressing problems. The Centers for Medicare & Medicaid Services (CMS) implemented monthly data reporting requirements for states during unwinding, some of which were required by Congress on a time-limited basis, and the agency has posted those reports publicly.^[9] The data have been invaluable in identifying trends and gaps and in allowing CMS to provide meaningful technical assistance to help states improve their operations. In addition, many state agencies published public-facing dashboards on their websites with additional data points, such as outcomes based on race and ethnicity. CMS announced in May 2024 that it will require states to continue reporting on key Medicaid renewal metrics beyond the unwinding period, another positive step toward increased accountability and transparency in state agency operations.^[10]

Ex parte renewals are a critical tool for keeping eligible people enrolled. Ex parte renewals, which state agencies conduct based on validated data sources and without the enrollee having to take action, ensure eligible individuals retain coverage without gaps and significantly reduce state administrative burden while assuring accurate and efficient renewals.^[11] Many states focused on improving their ex parte rates during unwinding. The national ex parte rate rose from around 30 percent when unwinding began to over 50 percent.^[12]

State innovations can help bridge communication gaps. Many states tested new communication and outreach strategies during the unwinding process that showed promise in reaching enrollees and helping them retain coverage. For example, the Maine Department of Health and Human Services called enrollees who did not return their renewal paperwork, resulting in over 1,200 households starting or completing their renewals in just one month.^[13] The Louisiana Department of Health used text messages and other methods to remind enrollees of upcoming renewals.^[14] Many of these best practices helped enrollees more easily renew coverage and can be replicated beyond the unwinding period.

Centering the perspectives of enrollees improves programs. People with lived experience can provide vital firsthand insights from their interactions with programs, such as what it’s like to enroll in or renew coverage.^[15] Many issues identified throughout the unwinding process came from discussing the experiences of Medicaid enrollees.^[16] Implementation of a new federal rule requiring states to facilitate Beneficiary Advisory Councils, described below, will provide further opportunities to center enrollees’ perspectives in Medicaid decision-making.

Federal oversight and support can help drive state successes. During unwinding, CMS increased its oversight and enforcement of longstanding federal Medicaid renewal requirements.^[17] CMS found 35 states to be out of compliance with at least one federal requirement related to the renewal process — requirements in place since 2014 with the implementation of the Affordable Care Act. CMS also engaged with states when they exhibited poor performance during unwinding, such as long call center wait times and application processing times above the 45-day standard applicable to most enrollees. Advocates shared invaluable information and case examples with CMS throughout the unwinding period, helping CMS work with states to address issues keeping people from coverage.

Recent Federal Changes Provide Best Practices for Process Improvements

Recent changes in federal rules and guidance, many in response to issues that unwinding highlighted, provide specific strategies and clear pathways for states to better streamline their enrollment and renewal processes and make them more responsive to the people they serve.^[18] While the recent change of leadership in Washington could lead to legislative, regulatory, or operational changes that reverse or modify some of these policies, they remain in effect as of this writing. And even if some are reversed or go unenforced at the federal level, states should continue to implement these best practices and advocates should continue to push for them. The best practices include:

Compliance plans. CMS announced in September 2024 that state agencies would be expected to come into compliance with all federal renewal requirements by December 31, 2026 and released compliance templates for state agencies to complete and submit by December 31, 2024.^[19] In these templates, states attested to areas of compliance and identified ongoing areas of non-compliance and their plans to address those deficiencies. The Trump Administration should continue to prioritize compliance plans moving forward. Even if that doesn’t happen, advocates and other stakeholders can use these plans to hold states accountable for addressing systemic barriers that make it harder for eligible people to retain coverage. Similarly, state agencies can use them to continue improving renewal processes.

Beneficiary Advisory Councils (BACs). A rule CMS finalized in May 2024 created new standards for state agencies to better engage Medicaid enrollees and their families in the Medicaid decision-making process by implementing BACs, through which people with lived experience in Medicaid provide feedback to state Medicaid agencies regarding policy development and program administration.^[20] BACs help ensure that the voices of Medicaid enrollees are centered in policy discussions and decisions, including decisions about making eligibility and enrollment processes more efficient. States must establish BACs by July 9, 2025 and publish their first annual report by July 9, 2026.

Medicare Savings Program (MSP) improvements. MSPs, administered by state Medicaid agencies, offer Medicare enrollees significant help with the costs of Medicare premiums and cost sharing. However, many people who are eligible for MSPs aren’t enrolled. In September 2023, CMS finalized the first part of a two-part rule requiring states to implement a number of streamlining policies to address barriers to MSP enrollment and simplify processes for eligible people to enroll.^[21] Even if the rule is reversed, state agencies can and should implement most of its policies to increase access to health care and reduce costs for older adults and people with disabilities.

Eligibility and enrollment simplifications. The second part of the rule, finalized in April 2024, also codified important policies to simplify the process for eligible people, including older adults and people with disabilities (that is, non-MAGI enrollees, whose Medicaid eligibility is not based on their modified adjusted gross income or MAGI), children, and pregnant people to get and stay enrolled in Medicaid and the Children’s Health Insurance Program (CHIP).^[22] The rule aligns non-MAGI policies with MAGI requirements, such as by prohibiting in-person interview requirements, limiting renewals to once a year, and requiring use of pre-populated renewal forms.^[23] It also improves recordkeeping practices to ensure program integrity and increases reliance on electronic data sources to minimize burdensome documentation processes. States should implement the changes possible regardless of the status of the rule in the future to help streamline the eligibility process for non-MAGI and CHIP-eligible populations, keep eligible people enrolled, and reduce administrative burdens for states and enrollees.

In addition to the recently codified rules, CMS released a series of guidance in November 2024 highlighting existing requirements and available strategies related to Medicaid renewals. States can implement these strategies now, and advocates can use these releases to support their state agencies in improving their processes. The releases provide guidance on:

• how states can implement the strategies they utilized through section 1902(e)(14) waivers during unwinding on a permanent basis;^[24]
• existing requirements and state options and flexibilities when verifying financial eligibility for Medicaid;^[25]
• existing ex parte renewal requirements and strategies that states can utilize to maximize their ex parte renewal rates;^[26]
• existing requirements regarding renewal forms;^[27] and
• new requirements related to transitions between Medicaid and separate CHIP programs.^[28]

Figure 1 provides a timeline of the implementation of new federal rules and policies in Medicaid. (Click on the image for the full version of the timeline.)

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State Agencies and Advocates Can Continue Improvements

Taken together, the lessons learned from the unwinding process and best practices in federal rules and guidance present a set of next steps for state agencies and advocates hoping to improve their state’s Medicaid program. Regardless of potential changes to federal requirements or enforcement practices, states and advocates can build on recent improvements.

State agencies can continue working to improve their programs and processes by:

• Ensuring compliance with federal renewal requirements. By complying with federal renewal requirements and implementing policies outlined in the final rules highlighted above, states can further streamline their Medicaid processes, reduce administrative burdens, and ultimately utilize caseworkers’ time and limited resources more efficiently. The compliance assessment process CMS mapped out last year gives states a roadmap and timeline to make changes and come into compliance.
• Prioritizing data sharing and transparency. State agencies should continue to provide regular data reports that include both the federally required data and any additional metrics that can help identify systemic issues and potential solutions.
• Continuing to streamline renewal processes. States should use the existing options amplified through the unwinding process, along with new federal rules and recent CMS guidance, to streamline their processes and continue reducing administrative burdens. For instance, state agencies can opt into many of the recently codified streamlining practices for non-MAGI enrollees regardless of potential future changes to the rule. They also can continue exploring strategies to improve their ex parte renewal rates.
• Building on communication best practices. States can take lessons learned from their own innovations and those of other states to continue improving how they communicate with enrollees. For example, states can bolster their communication capacity by continuing to text and email enrollees, increase their social media presence and advertising, and transition unwinding-related supports such as dedicated phone lines into long-term resources.
• Leveraging feedback to continue making progress. Implementing BACs and strengthening relationships with advocates can help states center the perspectives of people with lived experience in Medicaid as states improve their programs, processes, and overall decision-making. Agencies should prioritize keeping these feedback loops open, using them to identify trends, systemic issues, and solutions.^[29]

Advocates can build on the progress made during unwinding by:

• Building and maintaining relationships. Positive relationships with state Medicaid agency administrators are a critical factor in impacting policy decisions.^[30] Also, many advocates built powerful coalitions with assisters, health centers, and other community-based organizations during unwinding to improve their state’s Medicaid processes. They can maintain these relationships to continue working collectively towards shared goals.
• Supporting state implementation of BACs. Advocates can support their state agencies in prioritizing the voices of people with lived expertise as states implement BACs. For example, they can share advisory council best practices and recommendations, help the state identify potential BAC members, help BAC members participate meaningfully in the councils, and hold their agencies accountable in meeting the requirements for the councils.^[31]
• Monitoring state compliance with federal renewal requirements. In its September 2024 announcement of the compliance assessment process, CMS indicated that it intends to post the completed compliance assessments and plans publicly.^[32] This important commitment, if fulfilled, will give stakeholders a lens into gaps in states’ renewal processes and states’ plans for addressing them by the end of 2026. And if CMS doesn’t publicly release them, advocates can try to obtain them from their state agency. Advocates should also use these plans to hold states accountable for addressing systemic barriers that make it harder for eligible people to retain coverage. And they should promote state implementation of the new policies and procedures outlined above and monitor implementation of the changes.
• Monitoring state Medicaid data. CMS’s continuation of the renewal data reporting requirements beyond the unwinding period will enable advocates to assess state performance on key renewal and access metrics. Advocates should closely monitor these data to identify trends, better understand their state’s ongoing renewal performance, and provide recommendations and solutions.
• Partnering with CMS. Advocates should, to the extent possible in the new Administration, continue to provide on-the-ground information to CMS about the impact of state practices on enrollees. This feedback loop allows CMS to identify policies that need to be clarified, rules that need to be changed, and areas where states may need additional technical assistance. Advocates should also monitor CMS in its oversight role to hold states accountable where they are not following federal requirements by asking questions and requesting additional data and information, continuing to elevate issues and, when possible, following up on outcomes.