How states approach Medicaid eligibility redetermination will have big implications for enrollees: KFF analysis

Most states plan to take a year to 14 months to complete Medicaid eligibility checks and disenrollment as pandemic-era protections for Medicaid enrollees will expire March 31.

At the start of the pandemic, Congress boosted the federal matching rate for state Medicaid payments. However, states had to agree to not drop anyone off the Medicaid rolls for the duration of the public health emergency.

States have been preparing for a while for when they must start redetermining the eligibility of Medicaid recipients. A must-pass omnibus spending package at the end of December included a requirement for states to start eligibility redeterminations by April 1. The concrete deadline—combined with a gradual phase-down of federal funding—means states can reach out to beneficiaries to detail the impending change.

But how the unwinding of the federal continuous enrollment provision affects enrollees, their health coverage and state budgets will vary according to states’ differing approaches and administrative capabilities, according to a Kaiser Family Foundation report.

A new survey from KFF, in collaboration with the Georgetown University Center for Children and Families, presents a snapshot of actions that states are taking to prepare for the unwinding of the provision that has paused Medicaid disenrollments since February 2020. 

Most states (43 of 49 reporting states) plan to take 12 to 14 months to complete the unwinding process and return to routine operations. Taking more time to initiate and complete the unwinding process can help avoid overwhelming staff resources and prevent inappropriate terminations but could maintain enrollment for potentially ineligible people for longer, according to the KFF analysis.

The KFF survey of state Medicaid and Children’s Health Insurance Program (CHIP) officials finds that many states are using an array of strategies to promote continuity of coverage, while other states have adopted policies that may make it harder for people who are still eligible to retain coverage. Staffing shortages and systems limitations could also affect whether eligible enrollees are able to remain enrolled, according to KFF.

KFF has estimated that enrollment in Medicaid and CHIP will have grown by 23.3 million enrollees, to nearly 95 million, by the end of March when the continuous enrollment provision expires. Millions of beneficiaries are expected to be disenrolled over the next year, including some who are no longer eligible for Medicaid and others who still qualify but lose coverage due to administrative paperwork problems.

In the new survey, the one-third of states that were able to report projected coverage losses estimate that about 18% of Medicaid enrollees will be disenrolled after the continuous enrollment provision ends.

A study back in December from the left-leaning think tank Urban Institute found that 18 million people could lose their insurance coverage during the redetermination process. Another Urban analysis released last month found that many people are not aware that redeterminations are set to resume.

According to the latest survey, more than two-thirds of the states (35 of 49 reporting states) are adopting an approach to prioritizing renewals that considers multiple factors, including time since the last renewal and potential ineligibility.

A majority of states (43) have continued to process ex parte renewals over the past year, according to the survey. States are required to first try and complete renewals through ex parte processes by using reliable data sources to verify ongoing eligibility. Ex parte renewals reduce the administrative burden on both states and enrollees and can lower the number of disenrollments that occur because an enrollee is unable to complete the renewal process. 

Over half of the states (30) have taken steps to increase the share of renewals completed via ex parte.

About half of the states (27) have been flagging individuals who may no longer be eligible or who did not respond to renewal requests, including six states that are conducting data matches to identify these individuals.

Many state Medicaid programs are adopting continuous eligibility policies for children, postpartum women and some adults that will help more people retain coverage during the unwinding. A total of 37 states have extended postpartum coverage to 12 months, and 26 states provide 12-month continuous eligibility to some or all children in Medicaid and CHIP, the survey found.

However, some states have not adopted these strategies. Several states lack fully automated systems, and 12 states process some or most renewals manually. In addition, 11 states have ex parte renewal rates below 25%, which will increase the administrative burden on staff and enrollees. 

The challenge of processing an unprecedented volume of eligibility renewals and disenrollments comes at a time when most state Medicaid programs face significant staffing challenges.

The survey finds that more than half of reporting states have staff vacancy rates greater than 10% for eligibility workers (16 of 26 reporting states) and slightly less than half for call center staff (13 of 28 reporting states). States are adopting multiple strategies to address eligibility staffing shortages, including approving overtime and hiring new staff, temporary workers, or contractors, according to the report.

A majority of states (41) also are engaging managed care organizations to conduct outreach and assist members.

How the unwinding impacts Medicaid enrollees and state budgets will vary significantly from state to state depending on each state’s systems capabilities including ex parte renewal rates, communications strategies, staff capacity and adoption of operational policies that make it easier for people to stay enrolled, wrote the researchers from the Georgetown University Center for Children and Families.

Researchers anticipate that the uninsured rate will increase as states resume Medicaid disenrollments. "Most people who are disenrolled from Medicaid because they are no longer eligible should have a path to other coverage options through the Marketplaces or an employer, but knowledge of how and where to apply as well as affordability concerns may remain a barrier for some," the researchers wrote in the report.

"Research indicates that 65% of people disenrolled from Medicaid experience a period of uninsurance in the year following disenrollment. At the same time, disenrollments for procedural reasons among people who remain eligible are expected to be high. Boosting staff resources and consumer assistance capacity, actively monitoring the unwinding to identify issues, and rapidly responding to systemic or recurring problems can help avoid disenrollments that lead to coverage losses," the researchers wrote.

A new industry coalition aims to avoid coverage lapses for people who may be culled from the program. The Connecting to Coverage Coalition is spearheaded by AHIP, the health insurance industry's largest lobbying group, and its other founding members include the American Cancer Society Cancer Action Network, the Federation of American Hospitals, the Blue Cross Blue Shield Association and the Association for Community Affiliated Plans.

The national effort is seeking to provide a single source for information about the redetermination process and to build solutions that ensure people are able to find the coverage the works best for them and their families, Paige Minemyer reported.