Medicaid managed care plans will be affected as states shed enrollees because of the end of the continuous enrollment provisions of the COVID-19 public health emergency.
As states across the country remove millions of people from the Medicaid rolls, paperwork and red tape are the reasons a large percentage of enrollees in several states are losing coverage. Between 80% to 89% of those who have lost coverage in Florida, Indiana and New Hampshire have been removed from the Medicaid rolls for procedural reasons as of mid-July according to a Kaiser Family Foundation (KFF) tracker.
According to the foundation’s mid-July tally, close to 2 million across 29 states and Washington, D.C., have been disenrolled from Medicaid since the disenrollment process began in April, while 3.2 million people have had their coverage renewed.
Although the federal government and some states have expressed alarm about the number of people losing coverage, other states seem to have a different attitude, according to Edwin Park, J.D. “Because of ideology or budget, it’s exactly what they want,” he says. Park is a research professor at the McCourt School of Public Policy at Georgetown University.
Florida, which has almost 5 million Medicaid enrollees and one of the largest Medicaid populations in the country, has already dropped just over 300,000 people from its Medicaid program. In South Carolina, Kansas, Connecticut, and Indiana, over 80% of the disenrollments have been for procedural reasons. KFF defines procedural reasons as the state lacking contact information or the applicant missing deadlines and not filling out paperwork correctly, contrasted to having an income that prices a person out of coverage, for example.
On the other end of the spectrum, only 10% of Medicaid enrollees in Michigan have lost coverage for any reason. The proportion is also relatively small in Virginia (20%), Georgia (21%) and Iowa (21%).
Prior to the COVID-19 pandemic, Medicaid enrollees had to regularly reapply to keep their Medicaid coverage. The 2020 COVID-19 public health emergency changed that and required that people remain continuously enrolled in Medicaid programs for the states they lived in to receive enhanced federal funding. As a result, Medicaid enrollment ballooned. KFF estimates enrollment in Medicaid and the Children’s Health Insurance Program — a program for low-cost coverage for children whose families have incomes too high for Medicaid eligibility — climbed by almost 22 million people between January 2020 and January 2023, a 30% increase. But with the end of the public health emergency, the requirement for continuous enrollment ended in March 2023. Nineteen states began disenrollment in April or May, and 22 more started the process in June. KFF has estimated that between 8 million and 24 million people could ultimately be cut from the Medicaid rolls.
Spotlight on Florida
The disenrollment from Florida’s Medicaid program has garnered attention for several reasons. It has one of the nation’s largest Medicaid programs when measured by number of enrollees and the highest of disenrolled people in absolute terms. And, of course, its governor, Ron DeSantis, is a candidate for the 2024 Republican nomination for president.
The state’s actions prompted more than 50 disability and disease groups and other organizations to send a letter to DeSantis in May requesting that he have the Florida Department of Children and Families pause the redetermination process. The letter says children and families have been particularly affected, and it mentions a 7-year-old boy experiencing remission from leukemia who can no longer receive follow-up care. Many people did not receive notice of the redetermination process, individuals have been struggling to reach the state’s call center for help and information is lacking on how to appeal disenrollments, the letter says.
DeSantis administration officials have countered that they have a strong outreach campaign that includes contacting enrollees who have not applied for Medicaid coverage multiple times.
The disenrollment “put people at risk of losing the healthcare they need,” according to Jennifer Haley, a principal research associate at the Urban Institute, and the loss of coverage for children is “especially worrisome.”
Idaho is among the outliers, having cut almost 76% of those enrolled; Park says the state has paused its disenrollment process because of various technical issues.
Kansas also has a high rate of 70%. KCUR-FM, the National Public Radio station in Kansas City, reported that most people who lost coverage did so because of procedural issues, and some blame delays in mail delivery. Those with April and May renewals are receiving a 30-day extension to turn in their paperwork, Christine Osterlund, Medicaid operations deputy director for the Kansas Department of Health and Environment, told the listeners to the radio station.
Arkansas is another state where more than 80% of those who have lost coverage have been cut for procedural reasons. Its population is a fraction of Florida’s but it has disenrolled more than 110,000 people.
In Arkansas, 40% of those who have lost coverage are children, including 3,300 newborns. However, federal law requires newborns to be covered for at least a year. Haley notes that income levels for Medicaid eligibility are higher for children than those for adults, so some adults might lose coverage but their children would remain eligible for Medicaid. She says Medicaid managed care plans could head off some disenrollment if they were to reach out to their members to notify them of the redetermination process.
With the disenrollment numbers mounting, HHS Secretary Xavier Becerra sent a letter to governors in June putting a fresh emphasis on flexibilities that could keep people enrolled. Among Becerra’s suggestions were spreading out the renewal process over 12 months, using information on file from the Supplemental Nutrition Assistance Program and other programs to determine eligibility so a separate Medicaid form won’t be needed and partnering with Medicaid managed care plans to update contact information.
Shrinking Medicaid rolls will affect Medicaid managed care plans, notes Mark O’Hara, MBA, managing director at the consultancy AArete. Those plans could ultimately lose millions of members, and two-thirds of the payers expect to be left with members who have greater healthcare needs, O’Hara says.
It is unclear whether the people losing Medicaid coverage will lose coverage altogether. Some may buy coverage on an ACA exchange. Those who are employed may get coverage through their employers. Some may reach the age of eligibility for Medicare coverage. Earlier this year the Congressional Budget Office (CBO) estimated that 6.2 million people leaving Medicaid will become uninsured. Enhanced ACA subsidies are set to expire in 2025. If that happens, the CBO projects more people will become uninsured, and the share of the population that will be uninsured will increase to 10.1% in 2033.
Those who are dropped from Medicaid can reapply for it, but Park cautions they could experience delays in the resumption of coverage. In his opinion, states with high levels of terminations for procedural reasons should pause disenrollments, determine what is going wrong and take advantage of the flexibilities CMS is offering that they have not already adopted “to help reverse these disturbing trends.”
Susan Ladika is an independent healthcare and business journalist in Tampa, Florida.