[Now that Biden and Congress have ended pandemic protections,
nearly a million have lost Medicaid coverage for procedural reasons so
far — and many more will.]
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THE UNFOLDING MEDICAID DISASTER  
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Andrew Perez, Nick Byron Campbell
June 21, 2023
The Lever [[link removed]]


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_ Now that Biden and Congress have ended pandemic protections, nearly
a million have lost Medicaid coverage for procedural reasons so far
— and many more will. _

President Joe Biden, AP Photo/Manuel Balce Ceneta

 

As states have begun clearing out their Medicaid rolls for the first
time since the start of the COVID-19 pandemic, nearly three quarters
of the Americans who’ve lost coverage have been terminated not
because they’re ineligible for the low-income health insurance
program, but due to administrative reasons
[[link removed]],
such as failing to quickly respond to a piece of mail
[[link removed]].

In February, President Joe Biden bragged
[[link removed]] in
his State of the Union speech that “more Americans have health
insurance now than ever in history.” Biden made that comment six
weeks after he set the stage to massively increase the United
States’ uninsured population, when he signed legislation
[[link removed]] from
Congress ending the pandemic-era requirement that states maintain
Medicaid beneficiaries’ coverage in exchange for extra federal
funding.

The measure, passed as part of a year-end spending bill, allowed
states to begin mass disenrollments starting in April — a policy
decision that is naturally a boon for government contractors
[[link removed]] that
states pay to identify beneficiaries they could potentially remove
from the program.

Now that states have resumed annual Medicaid eligibility reviews,
an estimated 17 million
[[link removed]] people,
and potentially up to 24 million, could lose Medicaid coverage.
According to early data
[[link removed]] from
the Kaiser Family Foundation, more than 1.5 million Americans have
already lost coverage, and 1.1 million have lost their health
insurance for arbitrary reasons, not because they aren’t eligible.

The Biden Health and Human Services Department (HHS) estimated
[[link removed]] last
year that roughly 45 percent of people who would lose Medicaid
coverage once states could begin disenrollments would have their
insurance canceled for procedural reasons despite being eligible for
the program. The actual proportion of Americans being terminated for
such procedural reasons appears to be far higher — 73 percent —
according to the latest Kaiser data
[[link removed]].

At a health insurance industry conference last week, one lobbyist
admitted that the country is witnessing “distressing levels of
administrative procedural disenrollments.” A top official from an
organization representing state Medicaid directors downplayed those
numbers, arguing that it’s too soon to jump to any conclusions.

“In terms of the data we’re starting to see, I think we need to
proceed with caution,” Dianne Hasselman, deputy executive director
of the National Association of Medicaid Directors, said at a health
insurance industry conference last week. “It is very early. We
can’t make huge assumptions about the data.”

“Administrative Churning”

Medicaid, the national health insurance program for low-income
Americans, offers better, more comprehensive coverage for patients
than most health insurance offerings in the United States, but the
program is aggressively means-tested with strict income limits.

States are required to perform annual “redeterminations,” in which
they review Medicaid enrollees’ eligibility to make sure they are
still earning little enough money to qualify for the program.
Enrollees who miss or fail to respond to mail
[[link removed]],
sometimes within 10 days
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can quickly lose coverage.

Medicaid redeterminations and disenrollments were paused for three
years during the pandemic, after Congress passed COVID relief
legislation that required states to provide continuous coverage for
Medicaid recipients in exchange for more funding. That change
temporarily made Medicaid a much more generous program, one in which
adult enrollees grew by 13.5 million beneficiaries
[[link removed]],
or 39 percent.

Late last year, Congress started phasing out the enhanced Medicaid
funding and allowed states to begin the process of removing recipients
from their rolls this April. The measure was part of the $1.7 trillion
annual government funding bill that Democrats passed in the final days
of their legislative trifecta, before they turned over control of the
House of Representatives to Republicans.

Medicaid redeterminations often result in states cutting off coverage
to adults and children who are still technically eligible for the
program. The government calls this “administrative churning.”

As HHS explained
[[link removed]] in
a brief last summer, “Administrative churning refers to the loss of
Medicaid coverage despite ongoing eligibility, which can occur if
enrollees have difficulty navigating the renewal process, states are
unable to contact enrollees due to a change of address, or other
administrative hurdles.”

The agency predicted at the time: “Approximately 9.5 percent of
Medicaid enrollees (8.2 million) will leave Medicaid due to loss of
eligibility and will need to transition to another source of coverage.
Based on historical patterns, 7.9 percent (6.8 million) will lose
Medicaid coverage despite still being eligible (‘administrative
churning’), although HHS is taking steps to reduce this outcome.”

Kaiser’s Medicaid enrollment tracker
[[link removed]],
which is based on data from state websites and the federal Centers for
Medicare and Medicaid Services (CMS), reports a much higher
administrative churn rate: “Overall, 73 percent of disenrollments
are due to procedural reasons, among states reporting as of June 22,
2023.”

Some of these people may be able to re-enroll or qualify for
subsidized private insurance plans on the individual market, but those
plans generally offer worse coverage
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costs
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“Most of the people who are losing coverage for procedural reasons
are going to be eligible for something else,” said Arielle Kane,
director of Medicaid initiatives at the consumer advocacy group
Families USA. “Whether they're still eligible for Medicaid, or
they're eligible for subsidized coverage on the exchanges, or they now
have employer-sponsored coverage, we want them to be either
successfully re-enrolled or transferred to another source of coverage.
And we worry that when they just get procedurally disenrolled, they
won't know they don't have coverage until something bad happens.”

Kane added that “in an ideal world, the vast majority of these
redeterminations would happen in a passive manner — the state would
have the data to confirm their income, confirm their eligibility
status, and just re-enroll them without the consumer having to do
anything.” If that doesn’t work, states can “reach out and then
the beneficiary could confirm their information and add any details
that were missing,” she said. “We know this is possible.”

Last week, HHS Secretary Xavier Becerra wrote
[[link removed]] to
governors urging them to work to limit procedural disenrollments, and
ensure that cancellations are actually based on eligibility.

“I am deeply concerned with the number of people unnecessarily
losing coverage, especially those who appear to have lost coverage for
avoidable reasons that state Medicaid offices have the power to
prevent or mitigate,” wrote Becerra. “Given the high number of
people losing coverage due to administrative processes, I urge you to
review your state’s currently elected flexibilities and consider
going further to take up existing and new policy options that we have
offered to protect eligible individuals and families from procedural
termination.”

Kane noted that under the year-end spending legislation, CMS Secretary
Chiquita Brooks-LaSure can put a state on a “corrective action
plan” if it fails to comply with redetermination reporting
requirements, and potentially halt the state’s Medicaid
disenrollments due to procedural reasons.

“At least publicly, we don't know of any corrective action plans,”
she said.

A CMS spokesperson said the agency “is deeply concerned with the
numbers of eligible individuals losing coverage due to red tape,”
and added that “CMS will not hesitate to use the compliance
authority provided by Congress, including requesting that states pause
procedural terminations.”

Bad Incentives And Distressing Data

At a conference last week held by the health insurance lobbying group
America’s Health Insurance Plans, or AHIP, the organization’s vice
president of Medicaid advocacy, Rhys Jones, noted that Kaiser’s
Medicaid tracker
[[link removed]] is
showing “distressing levels of administrative procedural
disenrollments where people lose coverage for process reasons, not
because they actually lost eligibility.”

Hasselman, deputy executive director at the National Association of
Medicaid Directors, which represents state Medicaid officials,
encouraged the audience not to worry about these numbers — yet.

“The thing that is keeping Medicaid directors up at night is the
thought that they will remove someone from Medicaid coverage who
should not be removed,” she said, before explaining that there
“are a lot of different reasons” why someone might not have their
coverage renewed — including earlier eligibility reviews by states.

“We can’t just assume that it’s because [beneficiaries] didn’t
get a mailing, or they… started to go through the application and
didn’t complete all the information that was needed to verify
eligibility,” Hasselman continued. “I would urge everyone to
proceed with caution, and assure you that Medicaid directors and their
teams are looking at the data and trying to understand and make sense
of it.”

Since the enhanced federal funding for an expanded Medicaid population
is winding down, states have a financial interest in quickly trimming
their rolls as much as they can — as do the contractors helping
states find beneficiaries to terminate.

The country’s largest Medicaid eligibility and enrollment service
provider, Maximus, is usually paid by states based
[[link removed]] on
“volume flow and beneficiary interaction.”
[[link removed]] _Modern
Healthcare_, a major health care industry news publication, recently
wrote
[[link removed]] that
Maximus has “a financial incentive to find as many people ineligible
for Medicaid as possible.”

Maximus regularly
[[link removed]] sponsors
[[link removed]] conferences
[[link removed]] held
by the National Association of Medicaid Directors.

Asked by _The Lever_ about outside contractors like Maximus having a
potential financial incentive to speed up procedural disenrollments,
Hasselman said, “I think that Medicaid directors are very
independent in the decisions that they make. They are concerned about
Medicaid beneficiaries, first and foremost, making sure that people
who are eligible for Medicaid will stay on Medicaid. The last thing
that they would do would ever be to be pressured into making a
decision by a contractor.”

_Editor's note: This story was updated on June 22, 2023 with revised
Medicaid disenrollment numbers from the Kaiser Family Foundation._

_Have you recently lost Medicaid coverage due to procedural reasons,
or know someone who has? Please __GET IN TOUCH__ and share your
story._

_ANDREW PEREZ is senior editor and reporter at The Lever covering
money and influence. Andrew was previously a reporter at MapLight and
International Business Times. His work has appeared in ProPublica and
HuffPost._

_NICK BYRON CAMPBELL is Marketing Director & Reporter, focused on
engaging and growing The Lever's readership._

_THE LEVER, formerly known as The Daily Poster, is a
reader-supported investigative news outlet that holds accountable the
people and corporations manipulating the levers of power. The
organization was founded by owner David Sirota, an award-winning
journalist and Oscar-nominated writer who served as the presidential
campaign speechwriter for Bernie Sanders. Donate To The Lever
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* Medicaid
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* coronavirus pandemic
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* Medicaid Disenrollment;
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* CMS-Centers for Medicare & Medicaid Services
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