At the beginning of the month, states began what could be a lengthy, messy process of scouring Medicaid rolls and removing an estimated 15 million people who no longer qualify for the program but retained benefits because of a policy implemented in response to the COVID-19 pandemic.
The logistical challenge of winding down the continuous coverage requirement tied to enhanced federal Medicaid funding is complicated enough on its own, but federal and state authorities also are seeking to assist those losing Medicaid coverage with finding alternatives.
How thorough and successful those efforts are will go a long way to determining just how much the uninsured rate—and the uncompensated care burden—will rise when Medicaid redeterminations are completed over the coming months.
The healthcare sector has a big stake in the outcome. Health insurance companies that contract with state Medicaid programs stand to lose millions of members and will strive to convert as many as possible to other products, including exchange policies and job-based health plans. Hospitals, community health centers and other providers have a strong incentive to guide patients toward new coverage to minimize the financial impact of treating greater numbers of uninsured patients.
Medicaid lived up to its purpose as a safety net throughout the pandemic by capturing people adversely affected by economic shocks and keeping others covered during the public health crisis. This largely explains why Medicaid enrollment rose about 30% to 95 million from February 2020 to March 2023, according to the Kaiser Family Foundation. That was a major factor in the uninsured rate sustaining historic lows over this period.
The pandemic-era policy allowing people to remain on Medicaid even when their incomes rose above eligibility thresholds was always meant to be temporary, but that fact doesn’t diminish the ramifications facing regulators, beneficiaries, insurers that profit by administering Medicaid or providers anxious about a spike in unpaid medical bills.
The continuous coverage provision of the pandemic relief law is linked to the federal public health emergency declaration, which President Joe Biden will allow to lapse on May 11. In addition, Biden enacted a law last year setting April 1 as the start of a race to clear the books of ineligible enrollees.
The Health and Human Services Department projects that 15 million Medicaid beneficiaries will be removed from the program because of eligibility redeterminations, more than half of whom HHS reports will have access to the exchanges or employer-sponsored insurance.
States will take a variety of approaches, from moving swiftly to cut off Medicaid to those who no longer are eligible to deploying a more deliberate strategy that emphasizes helping people find replacement coverage. Arizona, Arkansas, Idaho, Iowa, New Hampshire, Ohio, South Dakota and West Virginia began eligibility reviews in February and another 15 started in March. The entire process could stretch out for more than a year, over which time the extra federal funding will phase out.
The federal government is working closely with states, insurers, benefits navigators and patient advocates to promote outreach to people at risk of losing Medicaid, Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure said in an interview.
“We are trying to use all levers, including working with the private sector, to make sure we hold onto coverage—whether that means people stay in Medicaid [or] transition to a marketplace or employer-sponsored coverage,” Brooks-LaSure said.
The unprecedented nationwide effort to reevaluate every Medicaid member’s eligibility requires “all hands on deck,” said Kate McEvoy, executive director of the National Association of Medicaid Directors. The organization is holding weekly calls to enable members to share updates and best practices and is liaising with CMS, she said. “There’s a lot of attention on not letting people slip through the cracks in the transition to the exchanges,” she said.
That could prove to be a tall order. According to a Medicaid and Children’s Health Insurance Program Payment and Access Commission report published in July, just 3% of those who lost coverage from Medicaid or a standalone CHIP program from 2017 to 2019 enrolled in exchange plans. Moreover, job-based health plans may not be a feasible option for lower-income people who cannot afford the premiums, and workers whose employers offer coverage are ineligible for exchange subsidies.
CMS has been preparing with states and the private healthcare organizations for more than a year, Brooks-LaSure said. Much work remains to be done.
“There are anticipated challenges to overcome including: large volume of renewals to complete; workforce challenges and staffing shortages; and the likelihood of outdated mailing addresses and other contact information for enrollees,” a CMS spokesperson said. The agency has issued guidance to states on subjects such as “national and local public engagement, paid advertising, media engagement, communications toolkits and materials, and direct-to-consumer communications,” the spokesperson said.
Health insurance companies such as Centene, Molina Healthcare and UnitedHealth Group are instrumental to carrying out this massive undertaking. Medicaid managed care organizations and the industry group AHIP are helping to verify members’ contact information, collaborating with local organizations and sharing eligibility data with the exchanges, McEvoy said.
Arizona’s state Medicaid agency, the Arizona Health Care Cost Containment System, is working with providers and directing beneficiaries losing coverage to HealthCare.gov and to insurance companies, a spokesperson said. The agency is using tactics such as targeting households with more than one Medicaid enrollee, using a state telephone hotline to notify people of alternatives and using text messaging for outreach.
The South Dakota Department of Social Services is using its website, mailers and social media posts to keep beneficiaries up to date on the redeterminations process, Secretary Matt Althoff said. In Arkansas, the Department of Health is taking a similar approach that includes paid advertising, a call center for outbound outreach and partnerships with providers, according to the regulator.
Idaho and Ohio have identified hiring and training strategies for staffing shortages and outreach plans to respond when mail sent to Medicaid members is returned as undeliverable.
States must also demonstrate they are using automatic renewals as much as possible by utilizing data federal and state agencies already possess instead of requiring beneficiaries to reapply, McEvoy said.
In Arizona, that means about three-quarters of its 2.5 million Medicaid enrollees will be subject to automatic redeterminations, the state Medicaid spokesperson said: “That takes a big burden off our eligibility workers.”