Why Are So Many Kids Losing Medicaid Coverage?

At the end of the COVID pandemic, more than half (54%) of the nation’s children were covered by Medicaid or CHIP; the vast majority by Medicaid. So, the lifting of the pandemic-related Medicaid continuous enrollment protection this spring is a really big deal, putting low-income children at risk of losing access to health care and/or exposing their families to medical debt.

In fact, researchers at federal Office of the Assistant Secretary for Planning and Evaluation (ASPE) projected that just shy of three-quarters of children losing Medicaid would be disenrolled despite remaining eligible. Children are most at risk of losing coverage during the unwinding despite being eligible – which is why we have been highlighting the special risk they face – and the likelihood that the child uninsured rate will go up if states do not take care in the process.

Based on early data and other facts emerging as states review eligibility for all enrollees, it seems that our worst fears about eligible children losing health coverage may very well be coming true. Already, we know over a half million children have been disenrolled in just 21 states that post child enrollment data on a more-timely basis. National data on Medicaid enrollment posted by CMS has a three to four-month lag. Keep in mind that by the end of 2018, about 828,000 fewer children were enrolled in Medicaid and CHIP compared to the previous year which resulted in an increase in the child uninsured rate of half a percentage point.

Children in states that have not expanded Medicaid face extra risk – as many of these states had high child uninsured rates to begin with – and have much lower income eligibility levels for their parents. Recent data from four non expansion states, Kansas, Mississippi, Georgia and Wyoming find that children constitute 2/3 to 3/4 of those disenrolled from Medicaid, which is extremely troubling given that many if not most of these children likely remain eligible.

Over half a million children have lost Medicaid already in 21 states where we have data. And that large number doesn’t include Texas, a state that disenrolled more than 500,000 people on June 1st, and where state agency employees recently blew the whistle on systems errors that caused inappropriate terminations. Many of those losing coverage in Texas were children and parents – we just don’t know the breakdowns.

We have long raised concerns that children would erroneously lose coverage in these states due to an “unwelcome mat” effect – where parents lose coverage and their children do too – even though the child remains eligible. Already we have heard of many reports of children being erroneously terminated alongside their parents due to system errors. Huge red flags are waving – not just in the non-expansion states – but especially in those states.

One of the questions we have is whether in the process of conducting ex parte (automated) renewals on a household basis, states are doing so incorrectly, and that this is impacting children negatively. Exactly what’s going on is unclear, so we’ve been scratching our heads over possibilities. If children are disproportionately affected, it is possible that the ex parte process is basing its results on the enrollee with the lowest income eligibility level (i.e. the parent). If the parent’s income suggests they are ineligible, then the entire family is sent a renewal form. Or it could be more simply that if any enrolled member cannot be renewed via ex parte, no one in the family is. Then if the renewal form is not returned, the entire family is disenrolled for procedural reasons.

Litigation filed yesterday in Florida points to another set of problems which may or may not be related to problems in the ex parte process but raises many questions about how eligibility is being determined. Families are receiving confusing and incomplete notices that tell them that their household is over income – but it is not clear what income standard is being used to determine eligibility (i.e. the very low parent eligibility standard in Florida which is just under $7,000 a year or the much higher eligibility standard for children – over $34,000 for a family of three – and even higher with CHIP).

Regardless of the reason, the clock is ticking, and everyday more children are at risk of becoming uninsured. Children are less likely than their parents to have access to employer-sponsored insurance since affordable offers of dependent coverage are less common than offers for employee coverage. Medicaid is the largest single insurer of children in the country.

The deeper we get into the unwinding process, the more worried we are becoming. At this point, we don’t have months or even weeks to delay making midcourse corrections because the damage is already being done. States that started terminating coverage as early as April 1st will reach the halfway mark – September 1st – in just a couple of weeks. Idaho has already disenrolled more than 70,000 children since April from Medicaid and CHIP – this equates to approximately 15% of their entire child population.

The Biden Administration must take swift and definitive action to pause all terminations in states with systemic problems. Governors who see large numbers of children losing coverage must pause the process. Coverage must be reinstated for those who lose coverage inappropriately. The time for action to protect children is now.