The agency on Thursday announced a recalibrated approach to Medicaid and the Children’s Health Insurance Program (CHIP) that it says will reinforce statutory boundaries, enhance oversight, and help ensure spending on benefits goes only to those who meet eligibility requirements. The shift in federal health policy comes in the wake of cuts to the programs and new requirements under the One Big Beautiful Bill Act.
In letters to states sent July 17, Drew Snyder, deputy administrator and director of the Center for Medicaid & CHIP Services, wrote that the agency is moving away from policies on continuous eligibility for Medicaid and workforce initiatives that include training programs to recruit and retain providers.
Expanded continuous eligibility allows some people to remain enrolled in Medicaid for a specified amount of time even if they are no longer qualified. Upon review, Snyder said CMS is concerned the extension could lead to increased costs to states and the federal government. Workforce initiatives were intended to strengthen and build the workforce serving Medicaid through primary care, behavioral health, dental, and home- and community-based services. The Centers for Medicare & Medicaid Services (CMS) estimates the workforce initiatives have cost more than a billion dollars.
“For too long, Medicaid and CHIP have drifted away from their core mission of providing a safety net for the truly vulnerable—that ends now,” said CMS Administrator Dr. Mehmet Oz. “CMS is restoring commonsense guardrails to Medicaid and CHIP, which will ensure that Medicaid remains a lifeline for those who are eligible and in need of quality health care.”
CMS doesn’t plan to approve new or extend existing section demonstration authorities that have allowed some individuals to remain enrolled in Medicaid or CHIP for extended periods of time, even if they may not have otherwise been eligible. In some cases, CMS said, children could have remained continuously enrolled in Medicaid or CHIP for up to six years, even if a change in their circumstances would have otherwise made them ineligible at some point. In other cases, CMS has approved up to 24 months of continuous eligibility for adults or targeted adult subpopulations. When this is allowed in many states over time, this practice can affect millions of enrollees and could lead to unsustainable costs.
In addition, CMS said it doesn’t plan to approve new or extend existing Medicaid-funded workforce initiatives to pay for certain job training or employment-related activities—which to date have involved more than $1 billion in federal commitments across California, Massachusetts, New York, North Carolina, and Vermont. CMS will allow currently approved initiatives to run out their course but does not anticipate extending them nor approving new waivers.
Going forward, CMS said it will focus on actions that demonstrate clear health benefits, cost savings, and strong accountability for federal spending.