Nearly 1 Out Of 5 People Currently On Medicaid May See Their Coverage End

People who enrolled in Medicaid during the last two years may soon be searching again for coverage. As the end of the public health emergency nears, states will re-evaluate Medicaid cases for eligibility, with many people expected to be dropped from the program.

Before the pandemic, state Medicaid agencies evaluated the eligibility of beneficiaries each year, removing people earning too much to qualify for the joint federal-state program. But to keep as many people as possible covered during the pandemic, the federal government gave more money to the states in return for a pledge not to drop anyone from the rolls.

That deal expires at the end of the public health emergency. When that occurs, state Medicaid officials will face the huge job of reevaluating each person's eligibility and connecting with people whose jobs, income, and housing might have been upended in the pandemic. People could lose their coverage if they earn too much or do not provide the information their state needs to verify their income or residency.

However, most of the 78 million people on the Medicaid rolls, including 33 million children, will remain eligible. Others will qualify for other health plans, some with the help of federal tax credits to help pay for their policies.1

The Kaiser Family Foundation estimates between 5.3 million and 14.2 million enrollees could lose coverage. As states resume redeterminations, it is likely that there could be enrollment churn as individuals who may be eligible lose coverage and then re-enroll in a short period of time.2

“This massive and unprecedented eligibility redetermination process holds great risk for children and their families,” Joan Alker, executive director of the Center for Children and Families at Georgetown University. State Medicaid officials are trying to figure out how to minimize the disruption.3

Health policy researchers warn that many people will fall out of coverage as they try to prove their eligibility for the first time in two years, or that overwhelmed Medicaid agencies will drop them by mistake.

State Agencies Under Pressure

Some observers predict the renewal tidal wave will require outreach rivaling that of a decade ago, when the Affordable Care Act expanded Medicaid.

• In Colorado, officials expect they will need to review the eligibility of more than 500,000 people, with 30% of them at risk of losing benefits because they have not responded to requests for information and 40% not qualifying based on income.
• In Utah, the eligibility of about 120,000 people, including 60,000 children, is questionable, said Jeff Nelson, who oversees eligibility at the Utah Department of Health. He said that 80% to 90% of those people were at risk because of incomplete renewals.
• Arizona Medicaid director Jami Snyder said 500,000 people are at risk of losing Medicaid. Processing all the eligibility redeterminations takes at least nine months; the end of the federal funding will add pressure to move faster.4

Solutions

Minnesota and New York have taken advantage of a little-used policy known as the Basic Health Program (BHP). Section 1331 of the Affordable Care Act gives states the option of creating a health benefits coverage program for low-income residents who would otherwise be eligible to purchase coverage through the marketplace.

New York and Minnesota offer plans with little or no premiums, co-pays or deductibles, a key selling point for proponents. Oregon and Kentucky are pursuing similar programs.5

The program gives states the ability to provide more affordable coverage for low-income residents and improve continuity of care for people whose income fluctuates above and below the Medicaid level.

Although state officials face considerable uncertainty, there are steps they can take to help mitigate disruption, said Sabrina Corlette and Maansasa Kona in an analysis for the Commonwealth Fund. Marketplaces can use their call center and consumer assistance resources to contact individuals who have been terminated and provide information about coverage options.

In addition, they can explore strategies like the approach taken in California, which will soon roll out a program to automatically enroll individuals who lose coverage in zero-premium marketplace plans. Massachusetts and Rhode Island are exploring similar programs.6

Footnotes:

1. “Many Medicaid Recipients Could Lose Coverage as Pandemic Ends,” Pew Charitable Trusts, March 11, 2022.

2. “Up to 14M enrollees could lose Medicaid coverage as states restart eligibility checks,” Fierce Healthcare, May 11, 2022.

3. “Millions of Children May Lose Medicaid: What Can Be Done to Help Prevent Them From Becoming Uninsured?” Georgetown University Center for Health Policy Institute, Center for Children and Families, February 17, 2022.

4. “Why Millions on Medicaid Are At Risk Of Losing Coverage in the Months Ahead,” National Public Radio, February 14, 2022.

5. “Oregon, Kentucky Dust Off an Obama-Era Policy to Expand Health Insurance,” Politico, April 30, 2022.

6. “Mitigating Coverage Loss When the Public Health Emergency Ends,” Commonwealth Fund, April 26, 2022.