Friday, March 31, 2023, will be the last day that Medicaid enrollees are protected from a loss of Medicaid coverage. As of April 1st, people will begin to lose their coverage if they are determined ineligible and many of those will encounter barriers in transitioning to other coverage. These include affordability, limited special enrollment periods to secure private insurance or enroll the Marketplaces, and complex application and plan selection processes. Others will have no affordable options, particularly in states that refuse to expand Medicaid to low-income adults without dependent children.
But our biggest concern is for people who lose coverage for procedural reasons. So, what are procedural disenrollments and why do they occur? Individuals are disenrolled for procedural reasons when the state needs additional information to determine if the enrollee remains eligible.
There are a variety of reasons why people lose coverage without being determined ineligible. Sometimes the mail doesn’t reach them, or the renewal notice is confusing or not in the enrollee’s preferred language. If enrollees are not able to get through to the call center, they may run out of time before the state processes the disenrollment. It’s also not uncommon for states to lose paperwork submitted by the enrollee, particularly when eligibility workers are overloaded. Enrollees may also have difficulty providing paper documentation, such as income for gig or cash employees.
While several researchers have estimated the number of people who may lose Medicaid during the unwinding, it wasn’t until August 2022 that we saw projections of loss of coverage due to procedural reasons released by the Office of the Assistant Secretary of Planning and Evaluation (ASPE). ASPE projects that 45% of people who lose Medicaid will be disenrolled despite remaining eligible — that’s 6.8 million people.
This risk is greatest for children, where a whopping 72 percent of children who are projected to lose coverage will still be eligible for Medicaid or CHIP. People of color are also at higher risk, with an estimated 64 percent of Latinos and 40 percent of Black non-Latinos losing coverage for procedural reasons compared to 17 percent of White non-Latinos.
Long before reading the ASPE report, the risk of a large share of eligible enrollees losing coverage for procedural reasons had been keeping me up at night, along with the difficulty of transitioning to other coverage. Some view procedural disenrollments as a “failure” of enrollees to provide information. In reality, it’s a failure within the system to streamline the process and remove administrative hurdles to enrollment and retention.
States that maximize the use of available data to renew eligibility without requiring forms or paper documents to prove eligibility will have fewer procedural disenrollments. The risk is greatest in states where most renewals require manual processing and the state has insufficient staff to handle the workload. States can minimize procedural disenrollments by ensuring that communications clearly articulate what actions are needed and by following up with enrollees who need to take action, preferably using multiple modes of communications.
We’re pleased that CMS and Congress, by way of the Consolidated Appropriations Act (CAA), are requiring states to report renewal outcomes, including procedural disenrollments, as well as how many people are renewed or sent to the Marketplaces. Keep in mind that not every procedural disenrollment means the loss of coverage for an enrollee who remains eligible. Some people, who have obtained other insurance or who know they are no longer eligible, may choose not to return their renewal form, thinking it unnecessary. However, a high number of procedural disenrollments is a warning sign that eligible people may be losing coverage inappropriately and could end up in the coverage gap.