New CMS Guidance on Six-Month Renewals in Medicaid
Kinda Serafi and Elizabeth Dervan, Manatt Health
On March 6, the Centers for Medicare & Medicaid Services (CMS) issued a State Medicaid Director Letter (SMDL) regarding the implementation of six-month Medicaid renewals required under H.R.1 (P.L. 119-21). Under section 71101 of H.R.1, beginning January 1, 2027, individuals eligible for Medicaid expansion coverage must renew their eligibility every six months, twice as frequently as under current law.[1] As outlined in the statute, six-month renewals apply to individuals eligible for Medicaid expansion coverage through a state plan or section 1115 waiver. Per the statute, this provision only applies to state 1115 waivers that cover the entire Medicaid expansion population and does not apply to states with partial expansions, such as Georgia or Wisconsin.[2]
As expected, the guidance largely tracks the statutory requirements in H.R.1 and underlying regulatory renewal requirements. For example, the guidance reminds states that, consistent with current federal rules, they must first conduct an ex parte review, send a prepopulated renewal form when coverage cannot be renewed based on available data, and provide individuals at least 30 days to respond.[3] The guidance also reminds states that they must continue to provide 12-month renewals (and no more frequently) to other modified adjusted gross income (MAGI) eligibility groups (such as pregnant/postpartum individuals, most children, and parents) as well as American Indian and Alaska Native individuals eligible for expansion. This means that some members of the same household will have different eligibility periods; CMS notes in the guidance that if an individual’s six-month renewal provides information that affects the eligibility of other household members, states must act on that information as a change in circumstances.
Notably, CMS provides states with two options for when and how to transition to six-month renewal periods. One option allows states to implement the change as individuals come up for their already-scheduled renewals, enabling states to maintain their existing renewal cadence and avoid major operational disruption. This approach is the most administratively feasible and is likely the path most states will take. The alternate option allows states to initiate certain renewals earlier in 2027 in order to shorten existing 12-month certification periods and move individuals more quickly onto a six-month cycle. While this option could accelerate implementation, it would introduce significant additional complexity for state operations and Medicaid enrollees.
Transitioning to Six-Month Renewal Periods
The two transition options presented to states in the SMDL are as follows:
- Maintain the Existing Renewal Cadence. One option CMS provides in the guidance allows states to apply six-month renewals as individuals come up for their already-scheduled renewal in 2027. For example, for a person whose coverage is effective August 1, 2026 through July 31, 2027, the state would process their renewal as scheduled and apply a six-month renewal accordingly, extending their eligibility from August 1, 2027 through January 31, 2028. This option is the most administratively efficient for Medicaid enrollees as well as states, allowing individuals to continue their coverage through their already-scheduled certification periods and not requiring state systems to establish new timeframes at the start of 2027 when states will also be launching major changes related to Medicaid work reporting requirements. This approach would help states maintain a smoother cadence of renewals throughout 2027 (as opposed to condensing renewals at the start of the calendar year) which would reduce backlogs and preserve caseworker capacity. For these reasons, most states have already planned on pursuing this approach as part of their operational planning.
- Accelerate the Transition to Six-Month Renewals. As an alternative option, CMS is allowing states to move renewals that would be initiated on or after January 1, 2027 to an earlier point in time to get closer to a six-month renewal period. For example, for a person whose coverage is currently scheduled for May 1, 2026 through April 30, 2027, the state could initiate the renewal at the start of January to shorten the renewal period. (A state would normally initiate this individual’s renewal around February to conduct the ex parte) States cannot initiate renewals in this way before January 1, 2027; cannot apply this approach to renewals currently scheduled to be initiated before that date; and cannot create renewal periods shorter than six months. To the extent states adopt this option, states must notify individuals whose 12-month eligibility period would be cut short. While this option allows states to implement more quickly, reorganizing and condensing renewals in this way would create significant operational and administrative complexities for state systems and staff, potentially increasing the risk for system errors and increased costs—all of which would be exacerbated by the simultaneous launching of work reporting requirements at the start of 2027. This approach would also likely generate confusion among Medicaid enrollees who would be anticipating a full year of coverage, contributing to potential procedural coverage losses.
Looking Ahead
Adopting six-month renewals reflects a major change in Medicaid eligibility that will lead to increased administrative requirements and challenges for people as well as state programs, all of which will be compounded by the other significant eligibility changes taking effect under H.R.1, including Medicaid work reporting requirements.
As states prepare for these and other changes to Medicaid eligibility, considering how to streamline renewals and leverage automated ex parte processes as much as possible will be crucial to helping eligible people stay covered and to reducing administrative burdens for individuals, state systems, and caseworkers. To this end, states may consider adopting permanent strategies to increase ex parte renewals published by CMS in the wake of Medicaid unwinding, if they have not yet already done so. These strategies help to reduce administrative burdens for people with Medicaid coverage, including people beyond Medicaid expansion programs. Additionally, while these ex parte strategies may not directly address challenges associated with work reporting requirements, these strategies streamline underlying renewal requirements—freeing up states’ capacity and reducing procedural hurdles for enrollees as they absorb new and complex processes tied to work reporting requirements. These strategies will also help mitigate against application and renewal processing backlogs, which CMS’ SMDL notes could put states at risk of compliance action.
As states are already opening and modifying their eligibility and information technology systems to implement work reporting requirements, this moment is a timely opportunity to improve ex parte rates and streamline overall eligibility operations. Doing so will be key to implementing H.R.1’s forthcoming changes in a manner that protects coverage for eligible people.
[1] These changes apply to all states and Washington D.C.; they do not apply to the territories.
[2] This application of six-month renewal is notably different from the Medicaid work reporting requirements provision, which applies to individuals eligible for Medicaid expansion under the state plan as well as individuals eligible for coverage that qualifies as minimum essential coverage through a section 1115 waiver who are between the ages of 19 and 64, not pregnant, and not eligible for Medicare or another Medicaid eligibility group.
[3] See 42 C.F.R. § 435.916 (2023). Section 71102 of H.R.1 imposed a moratorium prohibiting CMS from implementing certain provisions in the “Medicaid Program; Streamlining the Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes,” 89 Fed. Reg. 22780 (April 2, 2024) (the “2024 E&E Final Rule”). Consistent with this moratorium, prior longstanding federal regulations will apply. In the SMDL, CMS refers to the renewal requirements at 42 C.F.R. § 435.916 in effect as of 2023.