Children’s Medicaid Coverage Losses Top 500,000 Since April

Over half a million children have been stripped of their Medicaid coverage since April, sparking concerns that state Medicaid programs haven’t done enough to protect care for the nation’s most vulnerable children.

So far, 21 states—including Florida, Ohio, and Washington—have reported significant coverage losses for children since Medicaid eligibility checks were allowed to resume, according to data compiled by the Georgetown Center for Children and Families.

Florida has the steepest drop, with data showing 128,500 fewer kids with insurance since May.

The early numbers have pressured federal regulators and state programs to address systemic issues that are contributing to the high numbers of coverage terminations. KFF estimates that over 70% of youth lost their Medicaid coverage in these states due to procedural mishaps by parents submitting forms and the state agencies processing them.

Concern about termination of otherwise eligible beneficiaries has pushed the Centers for Medicare & Medicaid Services into action.

“Where we have identified problems, we have worked with states to pause coverage terminations, reinstate coverage for people, and implement systems changes immediately,” Daniel Tsai, CMS deputy administrator and director of the Center for Medicaid and CHIP Services, said in a statement to Bloomberg Law.

Procedural shortcomings include the inability to address chronic staffing shortages, denials due to lost paperwork, and failure to inform beneficiaries about higher income limits for child Medicaid and Children’s Health Insurance Program eligibility.

Medicaid rolls swelled during the Covid-19 pandemic as emergency provisions barred state programs from conducting eligibility redeterminations. About 35 million children were on Medicaid as of March 2023.

The loss of coverage for children due to procedural reasons was telegraphed months in advance by both CMS guidance and independent research from groups like the Commonwealth Fund and the Georgetown Center for Children and Families.

The Georgetown center warned last year that up to 6.7 million children could lose Medicaid coverage in the redeterminations process, which will run into 2024.

Joan Alker, the center’s executive director, said in an interview that the data coming in so far has done little to ease fears that states haven’t done enough.

“About 18 months ago, we wrote a report and we projected that the number of uninsured children could more than double as a consequence of this process.

“We won’t know the full answer to that until next year, but so far, I’m not feeling optimistic,” said Alker.

Alker also cautions that the current data is likely an underestimate, with several major states like California, Georgia, New York, and Texas having yet to release their numbers on how many children have lost coverage. There’s “easily another 100,000-200,000 kids based on renewal data,” Alker said in a social media post Thursday.

A Perfect Storm

Redeterminations require beneficiaries to reapply for health insurance, verify their income, and ensure that they meet all the other eligibility criteria. However, the process can be complicated and take up to 14 months, and families who fail to complete it on time may lose coverage.

In most states, eligibility requirements for Medicaid enrollment are substantially lower for children than for parents. This can often lead to eligible children losing coverage because their parents believe they made too much money, said Alker.

Leaders of the Centers for Medicare & Medicaid Services also pointed to several factors that led to this year’s unprecedented rate of youth coverage loss. This includes lengthy call center wait times, difficulties tracking down current addresses, and glitches with state automatic renewal processes.

These systemic problems have surfaced in states like Florida and Missouri, where beneficiaries looking to contest a denial have experienced call center wait times of 40 minutes or longer, leading to nearly half of the beneficiaries abandoning their call.

Malfunctions with automatic renewal systems also have left eligible families without coverage unnecessarily, Tsai said in a press call. Those systems allow for automatic eligibility checks, where income information is automatically compared against data from sources like the Internal Revenue Service, Social Security Administration, and the Supplemental Nutrition Assistance Program.

“One of the most common things we’re seeing is—due to a range of system glitches—for certain populations, the electronic data matching failed,” he said.

State Medicaid agencies also have struggled to locate beneficiaries who may have moved.

Virginia’s Experience

Since Virginia began checking Medicaid eligibility in June, about 31,300 children have lost their coverage, including for procedural issues.

“What we have learned over the past few weeks and months, from calls we had with the National Association for Medicaid Directors, is that different states call procedural terminations different things,” Sarah Hatton, deputy director of administration at Virginia Medicaid, said. “So when you’re looking at procedural closures for Virginia, for us that includes things like the person moved out of state, individuals who request that their coverage be closed, and individuals who age out of eligibility once they turn age 19.”

Virginia Medicaid Director Cheryl Roberts notes that tracking down the addresses of families on Medicaid hasn’t been enough to keep eligible children enrolled.

Oftentimes, parents who receive the enrollment materials may be overwhelmed by the application process and neglect to fill out the necessary paperwork, Roberts said.

She said the state created an additional call center to walk parents through the application process.

“We are encouraging people to open their envelopes and do the work. Usually for young parents, that is the issue. If you are a young parent and you open an envelope and it’s too complicated, we want you to make that phone call,” Roberts said.

CMS Intervention

The CMS has introduced several mitigation strategies to prevent states with high levels of procedural terminations from continuing to disenroll eligible beneficiaries. As of July, the agency had put a hold on all coverage denials for a half-dozen states the agency believes failed to address systemic inadequacies.

These strategies also include asking noncompliant states to waive requests for asset verification and other extraneous information on renewal forms, requiring states without automatic income verification systems to manually confirm income against state databases, and requiring states to adopt an extended grace period for beneficiaries who have been recently disenrolled.

“Business as usual in the past included a lot of eligible people losing coverage for a period of time and then coming back to coverage at a later point,” Tsai said last month on a call with reporters. The status quo “is not something we believe we should accept.”

In addition, the CMS sent letters Aug. 9 to all state Medicaid agencies detailing the actions required to fix high call center wait times, excessive procedural terminations, and lengthy processing of financial eligibility forms.

Back to School

The CMS is also focusing on the back-to-school season to conduct targeted outreach to parents who have yet to fill out renewal paperwork.

The agency partnered with organizations like the Georgetown center and the Center on Budget and Policy Priorities to create a toolkit that school districts can use to guide parents through the process.

The toolkit includes supplemental materials in both English and Spanish that can be mailed to parents. Schools will also have access to a 62-second robocall script and a sample email prompt administrators can use for more targeted outreach.

Sasha Pudelski, director of advocacy at the American Association of School Administrators, said the outreach initiatives will be a major priority for school officials because school districts rely heavily on Medicaid funding for nursing services, mental health counseling, and special education.

“When children fall off the Medicaid rolls due to administrative errors in particular, that means that districts can’t get reimbursed for the services we’re delivering to them. Knowing who’s eligible for Medicaid, and keeping them connected to health care, is not just the right thing to do from a moral standpoint, but it’s also the financially prudent thing to do,” Pudelski said in an all-hands meeting with health partners.