By Christine Vestal, Stateline
Millions of parents who take their children to the doctor this year will hear devastating news: “Your Medicaid coverage has been canceled.”
That’s because all 50 states are undertaking the biggest reshuffling of health insurance coverage since the Affordable Care Act took effect in 2010.
But instead of adding insurance options for people with low incomes, this new effort will be taking away coverage — with no promise of a replacement.
Now that the COVID-19 public health emergency is ending, states are once again free to verify that enrollees are still qualified and cancel their coverage if they’re not. Experts warn that states could sever as many as 15 million Americans, including 7 million children, from the health coverage they relied on through the pandemic.
They could be taken off the rolls for a few reasons: changes in their income and other qualifying factors, failure to respond to a renewal notice or state-level paperwork glitches.
The most affected will be children, said Tricia Brooks, research professor at Georgetown University’s Center for Children and Families. “I don’t think people realize that 54% of the nation’s children are covered by Medicaid,” Brooks said.
About two-thirds will remain eligible, she said, but a huge number of those kids will be bumped from the rolls and their parents will have to reapply.
This upheaval comes as child vaccination rates sink to historic lows, a teen mental health crisis worsens, and millions of kids fall behind on routine screenings to detect physical and developmental problems that require early interventions.
Pediatricians worry that the plunge in coverage will result in millions of children forgoing the medical and mental health care they need at a critical time.
“What we do in the first years, impacts the rest of a kid’s life,” said Dr. Jesse Hackell, chair of the American Academy of Pediatrics committee on practice and ambulatory medicine.
“Before the pandemic, people lost their Medicaid eligibility on a regular basis, but it was only a few people here and there at any given time. But here, the numbers are going to be staggering and much of the responsibility to help them requalify is going to fall on our offices,” he said.
Hackell practices in New York, where the Medicaid agency has not yet begun to send out renewals. But in Arizona, Arkansas, Florida, Idaho, Iowa, New Hampshire, Ohio, Oklahoma and West Virginia, notices already have started going out.
A new analysis shows that states likely will vary widely on how well they manage the more-than-three-year backlog in renewal verifications.
Eight states — Colorado, Illinois, Indiana, Massachusetts, New Mexico, North Carolina, Virginia and Washington — have adopted policies to reduce unnecessary Medicaid cancellations and promote continuity of coverage. That’s according to a report published today by KFF, a nonprofit research organization formerly known as the Kaiser Family Foundation that tracks health policy.
At the other end of the spectrum, seven states — Arkansas, Missouri, Nebraska, Oklahoma, South Carolina, South Dakota and Wyoming — have taken the fewest precautions to ensure that eligible people don’t lose Medicaid coverage and experience gaps in access to their doctors and medications, the report said.
In general, the KFF report argues that states will be most successful at ensuring Medicaid coverage for those who remain eligible if they take a full 12 to 14 months to complete the process, follow up on returned mail and contact enrollees who have not responded to notices before terminating their coverage. In addition, states seeking to minimize unnecessary cancellations should automate as many renewals as possible using available government databases, the report recommends.
Cost-Cutting Efforts
On May 11, the Biden administration will lift its coronavirus public health emergency declaration, relieving states of a requirement not to cut anyone from the federal-state low-income insurance plan known as Medicaid, until the public health crisis ends.
As incomes sank during the pandemic and Medicaid renewals were frozen, the number of people who qualified for Medicaid grew by an estimated 23 million to reach a historic high of 95 million enrollees as of last month. The price tag reached more than $734 billion in 2021.
For nearly half of the 15 million adults expected to be excised from Medicaid rolls this year, the cancellation will be in error, the result of red tape, according to an analysis from the U.S. Department of Health and Human Services. For children, the national rate of unnecessary cancellations could be as high as 74%, according to the analysis.
Removing the millions of Americans who naturally would have fallen off the rolls were it not for the pandemic-related freeze is a job that some states are pursuing aggressively, to cut costs.
Other states are commencing the daunting process with more caution, to minimize the number of residents who unnecessarily lose coverage.
A lack of state expertise in processing Medicaid renewals after more than three years, combined with overall staffing shortages and aging computer systems, means that most states will struggle to complete the massive project in the 14 months allotted.
But politics is driving some states to finish as quickly as possible and reduce overall spending on low-income health insurance.
Ohio enacted a law in 2021, requiring the state Medicaid agency to complete some portions of the purge in three months, increasing the chances that more people who still qualify will lose coverage and be forced to reapply to get back on the plan.
Arkansas Republican Gov. Sarah Huckabee Sanders is backing a plan that shortens the culling process to six months, a move the federal health agency has warned could result in excess errors.
Wisconsin and Iowa are considering bills that would emphasize cost-cutting over caution when culling the Medicaid rolls and rely on parents to respond to multi-paged renewal applications rather than checking databases to automatically extend coverage for people who remain eligible.
At the same time, New Mexico passed a law promising to pay for the first two months of Obamacare insurance for people who no longer qualify for Medicaid; a Rhode Island law commits to paying for the first two months.
Smoother Transitions
Beyond legislative mandates, Medicaid agencies on their own can adopt policies for renewal processing that can either decrease unnecessary cancellations or increase them by erring on the side of more culling.
By one measure, for example, residents of Arizona, North Carolina, Oregon and Washington may be the least likely to erroneously lose coverage, according to a survey by KFF published earlier this month.
That’s because those states verify more than 75% of renewals by checking state and national databases on family income and other factors rather than requiring parents to document any income or family changes to stay on the rolls.
But database determinations are only as reliable as the state’s software programs used to automate renewals. And data-assisted auto-renewals are not the only policy choice states can make that will reduce or increase the chances a person will experience a critical gap in Medicaid coverage due to procedural snafus.
Some states are using multiple forms of communication, including texts, phone calls, emails, web portals and repeated mailings to alert people that they will be coming up for renewal and what they need to do to avoid a gap. Most are relying on health care workers, community organizations, hospitals and insurance administrators to help get the word out.
For patients who lose their coverage because their income increased or other life events made them ineligible for Medicaid, states with their own insurance exchanges — including California, Colorado, Connecticut, Idaho, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Vermont and Washington plus the District of Columbia — are more likely to be able to seamlessly reenroll people in coverage than the 32 states that rely on the national exchange.
That’s because with their unique ability to merge Medicaid and state enrollee data, states that operate their own exchanges can automatically transfer residents who fall off the Medicaid rolls to a similar exchange plan that matches their income and family size, Georgetown University’s Brooks explained. In California, for example, managed care companies that administer both Medicaid and state exchange plans are working with the state to shift patients to comparable plans within the same provider network.
Stateline, an initiative of The Pew Charitable Trusts.
