Millions of Americans could lose Medicaid insurance as the pandemic winds down

Perhaps the greatest success of the American health care system these last few benighted years is this surprising fact: The uninsured rate has reached a historic low of about 8 percent.

That’s thanks in part to the pandemic — or, more precisely, the slew of emergency provisions that the government enacted in response to the Covid crisis.

One policy was likely the single largest factor. Over the past three years, under an emergency pandemic measure, states have stopped double-checking if people who are enrolled in Medicaid are still eligible for its coverage. If you were enrolled in Medicaid in March 2020, or if you became eligible at any point during the pandemic, you have remained eligible the entire time no matter what, even if your income later went up.

But in April, that will end — states will be re-checking every Medicaid enrollee’s eligibility, an enormous administrative undertaking that will put health insurance coverage for millions of Americans at risk.

The Biden administration estimates upward of 15 million people — one-sixth of the roughly 90 million Americans currently receiving Medicaid benefits — could lose coverage, a finding that independent analysts pretty much agree with. Those are coverage losses tantamount to a major economic downturn: By comparison, from 2007 to 2009, amid the worst economic downturn of most Americans’ lifetimes, an estimated 9 million Americans lost their insurance.

Some will lose coverage because they are no longer eligible due to a change in income or circumstance, such as a child turning 18. States are supposed to direct these people toward other insurance options, such as the Affordable Care Act marketplaces.

But many of the people who end up losing their benefits — even most, according to some projections — could be people who are actually still eligible for Medicaid but slip between the cracks of the system. People who have recently moved are one particular concern, as are children and people with disabilities.

For people who watch health policy closely, the coming “redetermination” process is one of the biggest stories of the year, with major ramifications for Americans’ health.

A lot of people are going to lose coverage no matter what. That is inevitable. The emergency “continuous coverage” provision, which cost nearly $150 billion over the past three years, was never going to be indefinite. The US health system is not set up to provide that many people, some of whom are no longer eligible for the program, with indefinite health benefits, unless they are old enough to qualify for Medicare.

But the goal, according to people who advise and advocate for people on Medicaid in states across the country, should be to minimize the number of Americans who lose their Medicaid benefits even if they are still eligible for them, and to make sure that the people who no longer qualify for Medicaid get other coverage.

Don’t let too many people fall through the cracks. Otherwise, the coverage gains of the past few years could be quickly eroded.

“If people lose Medicaid, whether they’re ineligible or remain eligible for Medicaid, and they’re not connected with another form of insurance, that’s potentially devastating for individuals,” Emma Morris, a policy analyst at the Oklahoma Policy Institute, told me. “This is a really pivotal point.”

This year’s coverage losses could be particularly dramatic. But they’re also a symptom of a bigger, more persistent problem that predated the pandemic: People cycle on and off Medicaid coverage all the time, including for reasons as mundane as paperwork. It’s a problem that, historically, many states have shown little interest in solving, and one that is now reemerging with a vengeance.

The end of Medicaid emergency continuous coverage, explained

The task in front of public officials is enormous: check the eligibility of every single one of the 90 million people currently on Medicaid to confirm they still meet the criteria for their benefits. And if they don’t happen to reach someone because that person moved, or they think a notice from the state is junk mail? That person will find themselves out of luck — and out of Medicaid.

Preventing that worst-case scenario will depend on states getting the word out early and often and using all of the tools available to them to reach people. Whether they will actually do that is already creating some concern. Congress has given states up to 12 months to complete the redetermination process. But in Texas, where as many as 1 million people may lose coverage, state officials have said they want to finish it in eight months, for reasons that are not clear.

“That raises a concern of trying to do this fairly complex job in a shortened timeline and the risk that might lead to adverse redetermination outcomes for people that that still are entitled to being in Medicaid,” Jason Terk, a physician and chair of the Texas Public Health Coalition, said.

In an ideal scenario, many beneficiaries won’t have to do anything to affirm their Medicaid eligibility. States can check existing data sources to verify a person’s income. If they are still eligible, they will keep their benefits. If they are not, the state should let them know what their insurance options are. (We’ll come back to that.)

The problem is these automatic checks are something a lot of states were terrible at doing prior to the pandemic. Almost all states say they conduct what are known as ex parte renewals, meaning they use existing public data to verify people’s eligibility without the person having to do anything. Ex parte renewals were supposed to be mandatory under the Affordable Care Act. But, according to Jen Wagner at the Center on Budget and Policy Priorities, enforcement has been lax: A few states don’t do them at all, and 20 of them said they completed less than half of their renewals this way. Some states, including Texas, have decided not to adopt policies that make ex parte renewals easier, such as assuming people who are eligible for SNAP, or food stamps, are also eligible for Medicaid.

Now states’ ability to perform those tasks is crucial. Most states say their redetermination plans start with ex parte renewals, which will test the effectiveness of their databases and IT systems. And many Medicaid offices are beginning this process understaffed: One in five jobs posted at state Medicaid offices were unfilled, according to the National Association of Medicaid Directors. In some states, nearly half of the jobs, more than 40 percent, were unfilled.

“We’re seeing states struggling right now to keep up now, when you’re not doing renewals,” Wagner said.

The first way states are trying to minimize risk is by starting the process with certain groups of people who may be at less risk if they lose coverage, such as those who have never filed a claim while enrolled in Medicaid; for those recipients, the possibility of disrupting medical care seems lower. In states like Oklahoma, Missouri, North Carolina, and Florida, where I interviewed patient advocates and state Medicaid officials to get a better sense of states’ preparation, the plan was usually to save more vulnerable populations — older people, people with disabilities, and children — for the later phases.

For people whose eligibility cannot be confirmed via a public database, states will have to do it manually. That will mean sending out mail and other forms of communication to ask beneficiaries to send in information so their eligibility can be verified.

That can be a difficult task. People move, some frequently. They ignore mail. They may not know this is happening in the first place. Most states allow people to report eligibility details or change their contact info on their websites or over the phone, but not all do — and those services, such as a call center, have to be adequately staffed. Otherwise, problems can arise and people may give up rather than put up with a hassle.

In Florida and Texas, two states worth watching closely given their large size and right-leaning politics, Republican leaders have not appeared very engaged on the issue, even as doctors and activists in those states credit the state health agencies with taking it seriously.

“The political leadership is not particularly enamored with or concerned about necessarily enhancing Medicaid policy here in the state of Texas,” Terk said. “I would hope, and I would try to be optimistic, that the governor’s office would be more forceful in his messaging. … It would be helpful if that were to happen. But I’m not sure that it’s reasonable to expect that.”

There are myriad ways administrative friction leads to people losing benefits when they shouldn’t. States have to be invested in preventing it. In states like Missouri and Oklahoma, top elected officials have been actively fighting against the implementation of Medicaid expansion, which made many low-income adults newly eligible for the program; now many of the people who became eligible through the expansion in the past few years will have their eligibility checked for the first time. Policy analysts worry some of those people could lose coverage simply because they aren’t familiar with the process.

Another way people could lose coverage in the coming months is if they are legitimately no longer eligible for Medicaid but fail to get enrolled in a different insurance plan.

States could make a big difference in preventing that, by directing people to the ACA marketplaces (where they may qualify for government assistance) and the navigators who receive federal funding to help people sort their marketplace options and sign up.

Medicaid offices across the country have been planning for this for months. But it’s not clear some states are doing everything they can on to make sure people who are no longer eligible are enrolled in a new health plan In Florida’s redetermination plan, for example, the actual mechanisms for directing people to their other coverage options are left vague and navigators are not mentioned at all.

“A lot of these plans sound excellent. The question is, what do they look like in implementation?” Alison Yager, executive director of Florida Health Justice, told me. “There are invariably going to be challenges. This is too huge for there not to be challenges.”

According to the Georgetown Center for Children and Families, nine states have not even posted their public plan for this Medicaid unwinding. A similar number have not shared any kind of communications toolkit, which could be useful to the advocates and providers who will be on the front lines of educating people about the situation. (Here is an example from the state of Texas.)

Some people may have no viable option for coverage at all, if they’ve had a change in circumstance that renders them ineligible (such as a child turning 18) but they live in a state that hasn’t expanded Medicaid under the ACA nor do they have a high enough income to qualify for subsidies to purchase private insurance.

Florida is one of those non-expansion states. One family there, who shared their story with Florida Health Justice, has three members who all need regular monitoring and check-ups because of complex medical conditions. They were supposed to lose their Medicaid coverage in 2020, when their son turned 18, but that was postponed through the continuous coverage provision. When that policy ends, they may become uninsured because Florida has not expanded Medicaid under the ACA.

It all adds up to a dramatic and sudden US health policy problem that has laid dormant for the past three years: churn.

The problem of Medicaid churn remains

It is an absurdity of the American health system, compared to those of other developed countries, that millions of vulnerable people could end up becoming uninsured in a matter of months. But even in normal times, because of how our health system is set up, people with low incomes shift frequently between different insurance coverage, going from Medicaid to ACA insurance subsidized by the federal government or not having any insurance at all.

It’s called “churn,” and it has long been recognized as a problem. In 2018, about 10 percent of Medicaid enrollees cycled on and off the program within a year.

Sometimes, people can simply have a few months where they pick up extra work hours, boosting their income to the point they are no longer eligible, and they lose coverage. (Eligibility checks vary across states in normal times.) The next month, their earnings may drop back down, making them eligible once again — but then they have to sign back up.

It adds to the workload for those understaffed Medicaid offices and it can disrupt health care for the patients too. People don’t fill prescriptions when they have to pay more money out of pocket. They skip doctor’s appointments and other vital services.

Now, after the three-year pause on redeterminations eliminated that problem, the end of the emergency coverage will bring it back.

States could be doing more to prevent Medicaid churn — but, at least so far, they’re not. The low rate of ex parte renewals that automatically confirm eligibility was one way the US was coming up short pre-pandemic.

States are also not taking advantage of other optional policies that the federal government has made available. A state can, for example, extend coverage for a woman who becomes eligible during pregnancy through their first year after her child is born. Only three states have actually done so, according to the Georgetown Center for Children and Families.

A year of continuous coverage for kids is more common, and states such as Oregon and Washington have even approved multi-year continuous eligibility for children. On the other hand, more than a dozen states have not adopted that policy either and a number of others have conditions that limit their effectiveness.

Congress has recently added some new requirements to address the problem for the longer term, including that all states provide children with 12 months of continuous coverage starting next year. That should help. But it won’t eliminate the problem entirely. It will come back again to how well states perform in checking and re-checking people’s eligibility, now and in the future, and whether they are being held accountable when they fall short.

There has been more sustained interest in the problem of Medicaid churn with the end of the emergency coverage provision approaching. But it remains to be seen how long it will last. A reversion to the pre-pandemic normal would put beneficiaries at a higher risk going forward of losing their coverage than they should. Research has routinely shown people have more access to health care, use more health care, and self-report better health when they are enrolled in Medicaid. That is what people are losing when they lose their benefits.

Churn is inevitable in the multi-payer structure that the US has set up to finance its health care. But we could be handling it better. The massive redetermination process will be an immense test, forcing states to re-check the eligibility of every single beneficiary. But even once it’s over, individual patients will still face the risk of losing coverage when they perhaps should not. The problems churn creates are not going away.

“Churn doesn’t have to be what it is. Unwinding doesn’t have to be a disaster,” Wagner told me.

The stakes for the rest of 2023 are enormous, and Medicaid agencies have not always performed well in the past in making sure everybody who is eligible for Medicaid gets on it. Now, health coverage for millions of Americans hinges on their being able to get it right.