Loss of Medicaid After the PHE Will Likely Exceed 15 Million Estimated by Urban

The Urban Institute recently released a new report projecting that Medicaid and CHIP will have provided access to health care (and peace of mind) for an additional 17 million children and adults by the end of 2021. The increase is largely due to the COVID-related requirement that states keep Medicaid enrollees continuously covered during the public health emergency (PHE). When the PHE ends and states resume processing annual renewals and changes in circumstances, the report estimates that 15 million people, including 5.9 million children, will no longer be eligible for Medicaid due to increases in income as the economy regains strength over time. Using Urban’s Health Insurance Policy Simulation Model (HIPSM), the study’s authors project that almost all of the 15 million will have a path to other coverage.

What about people who remain eligible for Medicaid or CHIP but experience a gap or a loss of coverage altogether due to any number of administrative barriers? Based on the well-documented, high prevalence of lapses in coverage among people eligible for Medicaid, more than 15 million children and adults are likely to lose Medicaid as states unwind the continuous eligibility provision in 2022. And, even for the 15 million, a path to coverage does not mean that everyone will successfully transition to a new source of insurance if it is unaffordable or difficult to enroll. One study conducted in 2016 after ACA implementation noted that 25 percent of Medicaid enrollees change coverage within one year and that most of these beneficiaries (55 percent) also experience a gap in coverage.

At the end of the PHE, states will be faced with processing an unprecedented volume of Medicaid redeterminations and changes in circumstances. The Urban Institute report draws attention to some of the risks that are likely to follow in 2022 (under the assumption that the PHE will end in 2021) as states reinstate the process of redetermining eligibility. It notes that the trajectory of Medicaid enrollment after the PHE is lifted and until the end of 2022, as well as the rate at which enrollment will change in individual states, is uncertain.

In many cases, renewal information may not reach people who have experienced housing instability, a problem among low-income populations that has been exacerbated by the pandemic. If states move too quickly to catch up on overdue renewals, they will overwhelm the capacity of eligibility workers to process paperwork and of call centers and consumer assisters to help individuals remain enrolled or transition to another source of insurance. And, although CMS guidance allows states a full twelve months to resume routine eligibility operations, there will be political and fiscal pressure for states to move more quickly to disenroll people. For example, in the 2022-23 Ohio budget, lawmakers have called for the Medicaid agency to complete overdue renewals within two months. The state is also directed to request special authorization from CMS to conduct renewals on people enrolled more than three months regardless of when their renewal is due. Current regulations allow renewals no more frequently than every twelve months.

Historical trends, which are the basis for Urban’s estimates, may underestimate what will happen to enrollment and insurance rates due to the large number of people whose Medicaid coverage has been protected and the disruption that is likely to follow lifting the first-ever continuous eligibility maintenance of effort requirement. By the end of the PHE, it will have been in place for nearly two years, if not longer. While there is a lot of uncertainty, there are cautionary tales of what can happen when a state restarts redeterminations after suspending renewal processing for an extended period of time.

Take Missouri, for example. When the state implemented a new eligibility system in 2018 and restarted renewals (it’s unclear how long renewals had been suspended), one in six children (95,000) lost Medicaid coverage between January 2018 and June 2019. In 2018 alone, the uninsured child rate in Missouri increased from 5.7 to 6.5 percent.

Tennessee children experienced a similar fate. Over 128,000 children were disenrolled from Medicaid and CHIP in 2017 and 2018 after the state resumed renewals following more than a two-year suspension. From 2016 to 2018, the Tennessee rate of uninsured children increased from 3.7 to 5.2 percent.

And more recently, there’s the CHIP saga in Utah. The continuous eligibility requirement does not apply to CHIP, however, several states received CMS approval of disaster-related state plan amendments to keep kids continually enrolled in CHIP. Late last year though, CMS determined that it overstepped its authority in allowing states to provide CHIP continuous eligibility and informed the states that they should restart CHIP renewals. Utah was one of those states. When the state took action in April, more than 41 percent of CHIP enrollees, over 6,000 children, were disenrolled. But state officials believe that 85 percent of those who lost coverage likely remain eligible. Many are already returning, which results in re-applications and creates an avoidable increase in the eligibility agency’s workload.

We cannot be lulled into believing that as states resume normal eligibility operations there will be no coverage losses. State approaches to the phasing out of the continuous eligibility provision can and will make a difference, starting now before the end of the pandemic, by taking aggressive steps to update beneficiary mailing addresses and by maximizing the use of electronic data to renew coverage for those who remain eligible. Additionally, more can be done to provide consumer assistance to ease the transition between Medicaid/CHIP and marketplace coverage. Communications with enrollees, Medicaid MCOs, providers, navigators and assisters, and other stakeholders, before and during the resumption of routine eligibility and enrollment processes, will also be critical to keeping eligible individuals covered.

For more ideas on best practices as states plan and prepare for the end of the PHE, check out our Tips for Advocates.