Many Medicaid recipients could lose coverage as pandemic ends
Most of the nation will rejoice when the Biden administration lifts the public health emergency that has been in force since March 2020. But when that moment comes — probably this summer, absent another surge — it could put many millions of adults and children currently on Medicaid at risk of losing health care coverage.
Before the pandemic, state Medicaid agencies evaluated the eligibility of beneficiaries each year, removing from the rolls people living out of state or earning too much to qualify for the joint federal-state program. But to keep as many people as possible covered during the pandemic, the federal government gave more money to the states in return for a pledge not to drop anyone from the rolls. That deal expires with the end of the public health emergency.
Most of the 78 million people on the Medicaid rolls, including 33 million children, will remain eligible. Others will qualify for other health plans, some with the help of federal tax credits to help pay for their policies. But Medicaid officials, advocates and health policy researchers warn that many people will fall out of coverage as they try to prove their eligibility for the first time in two years, or that overwhelmed Medicaid agencies will drop them by mistake.
“This massive and unprecedented eligibility redetermination process holds great risk for children and their families,” Joan Alker, executive director of the Center for Children and Families at Georgetown University, said at a briefing on the situation last month.
State Medicaid officials are desperately trying to figure out how to minimize the disruptions — and losing sleep over it, several acknowledged. “We have a team working around the clock planning for this,” said Jeremy Vandehey, director of health policy and analytics at the Oregon Health Authority.
Pre-pandemic, the federal Medicaid match for every state was at least 50%, though some poorer states got a good deal more than that. Mississippi had the highest match rate, at almost 78%.
The first federal COVID-19 relief package increased every state’s match rate by 6.2 percentage points. In return for that bump, states had to agree not to boot anyone off Medicaid while the public health emergency was in force, even people whose incomes rose above the eligibility limit.
That provision translated to far greater numbers on the Medicaid rolls than ever before. More than 9 million Americans lost their jobs in the first year of the pandemic, which for many translated into the loss of employer-sponsored health coverage as well. Many found refuge in Medicaid, whose rolls increased by 14 million, according to the U.S. Centers for Medicare and Medicaid Services, known as CMS.
Once the public health emergency ends, states will have to determine the eligibility of every single Medicaid enrollee.
CMS issued guidelines last week asking states to accomplish the task within 14 months after the emergency expires. The original request was for states to complete the work within six months, but CMS lengthened the period after states protested.
But because the higher federal Medicaid matching rate will end when the public health emergency expires, all states will have a strong incentive to work fast and shed the costs of carrying ineligible people on the rolls. Ohio lawmakers, for example, have given the state’s Medicaid agency only three months to determine the eligibility of its 3.1 million Medicaid enrollees, despite the agency director’s warning that three months was not enough time.
Advocates fear that a shortened time frame in Ohio or any other state will increase the likelihood of mistakes. Errors could cause many eligible enrollees to lose their Medicaid coverage. That happens frequently even in non-emergency times. Advocates also worry that states in a rush to lighten their Medicaid rolls could fail to connect newly ineligible residents to other coverage options.
“We’ve done really great work in Ohio to reduce the uninsurance rate,” said Zach Reat, director of health initiatives for Ohio Association of Foodbanks, which helps enroll people in health insurance plans. “Rushing this renewal process will be a threat to that accomplishment.”
Neither Ohio Republican state Sen. Tim Schaffer, reportedly the author of the three-month requirement approved in a budget measure last year, nor the Ohio Medicaid agency responded to requests for comment.
But Nina Owcharenko Schaefer, a senior health policy analyst with the conservative Heritage Foundation, said states should move more quickly than the Biden administration advises. “Sadly, keeping individuals who no longer qualify on the program diverts attention and resources away from those who need it most,” she wrote in an email. “States would be wiser to move faster to clear out those that no longer qualify.”
Even the 14-month time frame will present a challenge for many state Medicaid agencies.
“This is clearly the No. 1 priority that our members are focused on right now,” said Matt Salo, executive director of the National Association of Medicaid Directors. “It is going to be the greatest inflection point in health insurance coverage in recent memory.”
Making the task even more difficult, Salo and others said, is that Medicaid agencies are suffering from a severe worker shortage.
“We’ll hire 50 people at a time, but then when their first day of work comes, many of them will have moved onto something else,” said Jeff Nelson, director of the Bureau of Eligibility Policy in the Utah Department of Health. “It’s that hot a market.”
Marivel Klueckman, the eligibility division director in Colorado’s Medicaid agency, noted that the $17 an hour the agency pays for jobs verifying applicants’ eligibility may not be enough to fill needed slots.
“Down the street you might have a fast food place paying $17.80 an hour,” she said. “That’s the competition we’re seeing.”
Beyond the overall shortage, during the pandemic many of the agencies’ most experienced employees have left. Once agencies find new workers — assuming they can find them — they will then have to take the time to train them
“Roughly 40% of the workforce in our eligibility teams have never processed normal eligibility determinations,” said Amy Dobbins, the Medicaid eligibility policy section manager with the Washington State Health Care Authority. “So, they’ll be on a learning curve.”
Theoretically, there should be a landing place for all Americans who lose their Medicaid coverage.
The Urban Institute released an analysis this week of the “great unwinding,” as some are calling the process that will ensue after the end of the public health emergency. It estimates that nearly 16 million people on Medicaid likely would be found to be ineligible, including 9.4 million adults and 6.4 million children.
Of the adults, the Urban Institute estimated that a third would be eligible for federal tax credits for Obamacare private insurance plans. (The analysis assumes that enhanced tax credits adopted during the pandemic would be made permanent.) Most of the remaining adults could be enrolled in employer-sponsored plans, the institute predicted.
The analysis forecasts that 57% of children losing Medicaid would qualify for the Children’s Health Insurance Program, another state and federal health insurance plan for children from families whose income is slightly above levels that would qualify for Medicaid. Most of the rest likely would be covered in a parent’s plan.
But even with those alternatives, many obstacles may prevent former Medicaid beneficiaries from making the transition without losing coverage. Health insurance is complicated, befuddling even the most informed consumers. Many of those dropped from Medicaid may not know about marketplace plans or how to connect with them. Even with subsidies, they may blanch at the price of premiums, deductibles or copayments, which, if they exist at all in Medicaid, are minimal.
Even those with incomes that still qualify them for Medicaid easily could be dropped.
After the dislocations of the pandemic, Medicaid agencies might not have current addresses for recipients, meaning that requests for income information might go unanswered. Even in the best of times, advocates say, many enrollees find it difficult to provide the agencies with the proper documentation.
Those concerns have many Medicaid officials worrying about losing hard-won gains in increased health insurance coverage and reduced racial health disparities that have occurred since implementation of the Affordable Care Act in 2014.
Vandehey, the Oregon Medicaid official, noted that Oregon reached its highest-ever rate of insured residents during the pandemic. “We have work ahead of us to do eligibility determinations for all 1.4 million, but doing it without erasing the gains we made during the pandemic in terms of access to insurance and lowering beneficiaries,” he said.
To minimize disruptions, many states are using social media, texts and other outreach to community organizations to encourage beneficiaries to update their addresses with their Medicaid offices. Some, such as Colorado, are turning to Medicaid managed care organizations and considering turning to third parties, such as utilities, to find current addresses.
“It’s going to take a level of outreach we’ve never seen before,” Vandehey said.
The Oregon House recently passed legislation giving Medicaid beneficiaries more time to respond to information requests. States also are spending more money on health navigators, who help enroll people in health plans. The Massachusetts legislature late last year allocated some of its $5 million in federal COVID-19 relief funds for that effort. CMS also is urging states to use automated wage and employment data to confirm income without asking beneficiaries to provide it.
The fear remains, though, that even if states are well prepared for the great unwinding, many thousands of Americans are going to lose their health insurance coverage after the public health emergency ends.
“We can do everything right,” Salo said, and people still will become uninsured.”