Renewed Eligibility Checks Threaten Medicaid for Millions

At the start of the pandemic, Congress sent extra money to states to bolster their Medicaid programs on the condition that they suspend eligibility reviews for the safety net insurance program. Low-income Americans, the thinking went, risked losing coverage because of bureaucratic snafus just when they needed it most. That agreement—which was extended eight times—is set to expire in April, threatening to leave millions of Americans uninsured. “There’s a high risk of people losing coverage, notwithstanding the fact that they’re likely to be eligible,” says Cindy Mann, a former Medicaid official who’s now a partner at Manatt, Phelps & Phillips in Washington.

Enrollment in Medicaid and the related Children’s Health Insurance Program (CHIP) increased more than 15% from 2019 to mid-2021, to almost 84 million, federal data show. Anyone with coverage will face a renewal assessment to make sure they still meet the program’s income requirements and other rules, which vary by state. Verifying eligibility can be a slog in the best of times, when small discrepancies in a name or address can lead to a loss of coverage. Doing it en masse after a two-year suspension of reviews promises to be even more chaotic.

States can try to determine whether residents receiving Medicaid remain eligible using existing data from, say, tax filings or unemployment claims. But if that fails, they’ll need to contact people directly to request further information. That’s where things often get messy. “So many enrollees have moved during the pandemic or have maybe changed phone numbers,” says Amber Kirchhoff, a director at the Illinois Primary Health Care Association, which represents clinics serving low-income patients. “Particularly those who are economically vulnerable.”

The Biden administration has given states as long as 12 months after the Covid‑19 emergency declaration ends to do the checks, and they’ll have discretion over how quickly people must be disenrolled if they fail. That means the chances of losing coverage hinge on how eager a state is to purge the rolls of Medicaid recipients and how well equipped its bureaucracy is to manage the process: Does the state advertise the changes? Do different data systems communicate smoothly? Do call centers have enough staff? For instance, Texans trying to access an online system to update their address must sometimes call to reset their password, which can mean hours on hold, says Jana Eubank, executive director of the Texas Association of Community Health Centers. “It’s incredibly burdensome,” she says.

Before the pandemic, several Republican-controlled states tried to restrict Medicaid eligibility by imposing work requirements. The policies were blocked in court, but conservatives who argue the program discourages people from getting jobs continue to pursue the idea. In January, Georgia sued the Biden administration to advance a plan tying expanded Medicaid benefits to work, education, or volunteering. In Missouri some Medicaid recipients were terminated after officials—relying on faulty data—judged that they’d moved out of state, the Kansas City Star reported in February.

New York, on the other hand, is running a $4 million ad campaign in three languages urging residents to “stay connected” and log in to their state health-care account. Those who do are prompted to verify their address and other information and asked to opt in to text-message reminders for alerts on eligibility reviews. “Our goal is that nobody loses coverage,” says Danielle Holahan, who leads the state’s health-care marketplace.

As many as 15 million people risk losing Medicaid once the verification process resumes, researchers at the Urban Institute estimate, though most would qualify for other plans available from employers or on the Affordable Care Act markets. The Centers for Medicare and Medicaid Services says it aims to ensure those who lose access to Medicaid get other insurance if they’re eligible. “We are very focused at CMS in making sure that as people transition, they don’t lose coverage but move to their next proper coverage home,” Chiquita Brooks-LaSure, a CMS administrator, said on a call with reporters last year.

Most states hire health insurers to manage their Medicaid benefits, and those companies want to hold on to members exiting the program. Anthem Inc., the No. 2 Medicaid insurer, expects eligibility reviews to resume midyear and says the shift will likely boost its commercial insurance offerings. Centene Corp., the top Medicaid insurer, has gained 2.4 million program members since the pandemic’s start. The company says it might lose half of them as states review eligibility, but it hopes to transfer some to its ACA business. “Obviously states want to make sure their citizens have health insurance coverage,” Chief Operating Officer Brent Layton said on a Feb. 8 call with analysts. “We’ve been working with them, and we’re preparing for it.”

President Joe Biden has sought to avert some of the disruption via the Build Back Better Act. The bill, passed by the House of Representatives in November but stalled in the Senate, would offer subsidized ACA coverage to many low-income people who nonetheless earn too much for Medicaid, particularly in Republican-led states that didn’t widen eligibility for the coverage. It would also prolong ACA subsidies that have helped increase enrollment by more than 3 million people since 2020.

Key congressional Democrats say extending the ACA support and preventing any major drop in coverage remains a top priority, but Senator Joe Manchin of West Virginia and Republicans remain opposed to much of what’s in the Build Back Better bill, and its fate is unclear. “The ACA kept people alive during the pandemic,” says Senator Chris Murphy, a Democrat from Connecticut. “We don’t want to see them lose that coverage now.”

To contact the authors of this story:
John Tozzi in New York at jtozzi2@bloomberg.net

Alexander Ruoff in Washington at aruoff2@bloomberg.net

To contact the editor responsible for this story:
Eric Gelman at egelman3@bloomberg.net

David Rocks

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