How to Avoid a Coverage Catastrophe with Medicaid Redetermination
By Erin Delaney
Health insurance coverage in America is undergoing one of the largest upheavals in recent memory as millions of adults and kids are being reconsidered for Medicaid and Children’s Health Insurance Program (CHIP) coverage.
During the pandemic, more than 20 million people were able to gain coverage from the pandemic-era funding provided by Congress to states to ensure people had coverage during a once-in-a-millennium global pandemic. It provided a safety net for Americans when they were faced with terrifying uncertainty about their health and the health of their families.
On April 1, four months after the federal COVID-19 public health emergency declaration ended, states resumed their Medicaid and CHIP redetermination process. Since then, troubling data has been emerging from states about what is happening to the 93 million Americans — nearly 1-in-4 people — who were enrolled in Medicaid or CHIP coverage.
We’ve hit a new alarming coverage milestone, seven months into the redetermination process. As of Nov. 21, at least 10,868,000 Medicaid enrollees have been disenrolled based on the data from 50 states and the District of Columbia. Millions more are expected to lose coverage in the coming months. Worse, in the 20 states that report age breakouts, children account for about 4-in-10 of these Medicaid disenrollments.
Most concerning among recently reported data is that 71% of people have been disenrolled due to procedural glitches, meaning states have outdated contact information, enrollees are increasingly confused by the paperwork, or are missing deadlines for completing renewal packets. And that’s not all — confusion abounds, as adults and children may or may not still be eligible for Medicaid and CHIP, may have other coverage options, or may remain eligible for Medicaid or CHIP but don’t know it.
There’s been awful stories about adults and children who are unable to receive the care that they need — missing medical appointments and procedures due to these administrative errors at the state level. The chaos and inefficiencies of this process are preventing millions of Americans’ ability to receive care. And we are only just over halfway through the process.
Months before the unwinding, the Biden administration predicted that the worst-case scenario of monthly disenrollments would result in an average of 1.5 million individuals disenrolled from the program over 12 months. Based on current data reported from states, we can see that the U.S. is well on its way to actualizing a scenario in which most individuals predicted to lose coverage will do so because of administrative-related disenrollment, especially for children.
As we near the holidays, when millions of Americans and their families are hyper-focused on the high cost of living and also struggling to afford medical care, policymakers across all levels of government need to do more to prevent further coverage losses that lead to unaffordable care.
While the Biden administration and states have taken action to mitigate coverage loss, more needs to be done to address the myriad of challenges to prevent even more Americans losing their insurance. The goal should be to ensure that those who are losing coverage because they are determined ineligible find new sources of coverage, and especially to ensure that those who may still be eligible for Medicaid and CHIP maintain that coverage.
Both state and federal lawmakers should focus on improving data collection and state utilization of available Centers for Medicare and Medicaid Services (CMS) waivers and flexibilities, maximizing coordination with various stakeholders, and continued intervention in states with high procedural termination rates.
My organization, the Progressive Policy Institute, has recommended several key policy recommendations, but policymakers should immediately implement three common-sense recommendations. First, Congress should create a permanent solution to the Affordable Care Act (ACA) subsidy cliff that will happen in 2025, and it should be better targeted than making the American Rescue Plan tax credit permanent. Because states must complete the redetermination process by June 30, 2024, the ACA subsidies will expire at roughly the same time millions of Americans and their children are losing coverage.
Second, CMS should require states to report how many children have been disenrolled from coverage. Only 20 states are voluntarily reporting this data. Not having a clear understanding of how many children are losing coverage will make any mitigation strategy to prevent children from losing coverage or to re-enroll them that much harder.
Finally, at the state level, states should maximize the use of their CHIP outreach dollars to ensure children have coverage. All state CHIP programs are required to conduct outreach to families of children who are likely to be eligible for CHIP or Medicaid and offer enrollment assistance. However, a recent report found that fewer than 13 states reported their direct expenditures for outreach.
The COVID-19 pandemic required an unprecedented response from states and the federal government to address the challenges that the country faced to ensure that Americans had access to health care. This unwinding period should be treated no differently. Should the U.S. face another public health crisis that demands a proportionate response to ensure health coverage and access, it will be critical to address Medicaid and CHIP coverage in a way that prevents this type of massive and disruptive coverage transition from happening again.
Erin Delaney is the director of health care policy at the Progressive Policy Institute.
This story originally ran in The Messenger on December 12, 2023.
