At a recent Medicaid Advisory Committee meeting, the state of Nebraska, the first in the nation to implement what will soon be a mandatory Medicaid work reporting requirement (WRR), shared the first data on what has happened so far in the first few months of implementation. Nebraska began implementing new rules for new applicants on May 1st and for existing enrollees on July 1st.
What are some key takeaways about the data?
- The number of Nebraskans losing coverage or being denied coverage at application is at least 1,090 (so far). I say “at least” because there is a large group of new applicants (4,434) who were unable to enroll during this period for “any other reason”. It is not clear if this category includes people who were unable to jump over red tape hurdles; this is a key question for the state to answer.
- As expected, the vast majority of people losing coverage or being rejected at enrollment is a consequence of red tape problems (i.e. “procedural denials”), not because they are not working or should be exempt. A whopping 92% of those who were enrolled in Medicaid and lost at renewal were “denied for failing to provide requested information” to show compliance with or exemption from WRR. It is harder to tell with the applicants because of the mysterious 4,434 number, but the rate of clearly reported procedural denials for new applicants is also very high at 84%. If you want a great rundown on the reality behind these kinds of procedural denials, watch “The Pitt” Season 2 Episode 13 or John Oliver’s take here.
- The state’s data reinforces the point that most people are deemed to be working (e.g., with monthly income of $580 or more) if the state uses its own data to determine that on an “ex parte” basis and doesn’t ask people to jump through paperwork hoops. Of 2,449 people who were renewed as a consequence of meeting the “qualifying activities” requirement, 97% met the $580 a month income threshold. While we don’t know whether everyone in this category was verified through a state’s data source, we know that one of the most streamlined ways for a state to assess for WRR compliance, especially without asking for more paperwork, is by looking at up-to-date income data sources.
- Almost two-thirds of those (61%) retaining coverage were exempted from WRRs primarily due to being a parent or medically frail.
The new rules appear to be having a bigger impact on those applying for coverage than those currently enrolled in Medicaid. I would love to know what percent of new applicants were getting denied prior to this policy being put in place – now it is over half (52%). Over time, this will result in lower Medicaid enrollment through attrition and more barriers to getting back on even if someone is still eligible.
It is also worth noting that because of the timing of Nebraska’s early roll-out, the state was not operating under the new rules on medically frail exemptions issued by the federal Centers for Medicare and Medicaid Services on June 1st which, at the 11th hour, tightened the standard considerably on what constitutes an exemption as a consequence of being medically frail. The state has to respond to CMS in October on how it will modify the medically frail process to align with the new rules. So presumably that pathway will get harder as the state is required to implement these tougher rules and the number of people losing or being denied coverage will grow more quickly.
I have been saying for years that Medicaid work reporting requirements are a flawed policy if the goal really is to incentivize work, but they are very effective at taking Medicaid coverage away by tangling folks up in red tape. Unfortunately, Nebraska’s data only reinforces this point.