The Risk of Coverage Loss for Medicaid Beneficiaries as the COVID-19 Public Health Emergency Ends
Kinda Serafi
Partner, Manatt Health
Cindy Mann
Nina V. Punukollu
Manager, Manatt Health
Toplines
Millions of Medicaid enrollees risk losing their coverage when the COVID-19 public health emergency ends. What can be done to minimize this risk?
When special pandemic requirements end, states will begin redetermining eligibility for nearly all Medicaid enrollees. They should prepare now to avoid triggering massive coverage losses.
States are required to keep people enrolled in Medicaid throughout the COVID-19 public health emergency (PHE) as a condition of receiving a temporary increase in the federal share of Medicaid costs. When the PHE ends — currently slated for December 2021, but could be extended — the enhanced federal funding will end and states will resume administering renewals for Medicaid eligibility, some of which have been pending for more than 16 months. Nearly all 80 million people enrolled in Medicaid will have their eligibility redetermined, triggering a high risk of coverage losses that is almost certain to fall disproportionately on Black and Latinx individuals who have experienced significant harm and dislocation during the pandemic. This can be mitigated through thoughtful planning and execution by the Centers for Medicare and Medicaid Services (CMS), states, health plans, providers, consumers, and advocates. For those concerned about coverage and equity, the stakes could not be higher.
Medicaid Redeterminations Create a Risk for Coverage Loss
Medicaid redeterminations have always been a source of coverage losses among eligible people because of paperwork barriers. Affordable Care Act rules aimed at reducing inappropriate terminations were adopted by states and have led to less churning. However, we've also seen significant coverage losses when large numbers are being renewed. This has happened, for instance, when states have had backlogs as a result of IT system delays. In 2018, uninsured rates climbed when more than 1.5 million low-income people lost their Medicaid coverage; evidence suggests the driving factor was complex, paper-driven redetermination processes. States are federally required to first evaluate eligibility based on available data sources, but IT limitations plague many states, hindering their ability to automate renewals. The fallback is a paper-based process; the agency mails renewal forms. For a host of reasons, many people fail to respond or don't respond on time. These reasons include complicated and confusing paperwork, additional barriers for people with significant health issues, and forms not reaching people because they have moved.
Several factors are converging to make the upcoming Medicaid eligibility redeterminations extraordinarily risky. Medicaid enrollment has grown sharply during the pandemic. From February 2020 through May 2021, total Medicaid and CHIP enrollment grew by 18.7 percent in the median state (among those with publicly reported data); state Medicaid and the Children's Health Insurance Program (CHIP) have added nearly 10 million enrollees since the beginning of the pandemic.1 Moving through the large numbers of redeterminations is a huge undertaking made even more challenging because so many people have moved or lost housing because of the pandemic or a natural disaster. While CMS has issued guidance allowing states 12 months to conduct the necessary redeterminations, states will not be able to maintain the 6.2 percent enhanced federal match once the PHE ends, and the loss of the additional funding could prompt states to rush the process.
Now Is the Time to Act
We need to plan for and implement strategies to prevent unintended coverage loss. An array of strategies has been identified by CMS. While a state's blueprint will depend on policies and IT capabilities, they should consider these three strategies:
Partnering with stakeholders. Starting now, states and key partners, including managed care plans, providers, pharmacies, community leaders, and consumer groups, can work together to consider policy and system changes and establish a timeline to execute them. States could leverage available funding sources, including COVID-19 relief funds, to invest in community-based navigators who can support families and communicate with community partners as the process is rolling out. Armed with feedback from the community and data as the process unfolds, states could consider a "circuit-breaker" approach: if looming coverage losses appear to be high or disproportionately affecting communities of color, the state could pause and reassess.
Improving the redetermination process. States and CMS should conduct an IT systems readiness review to establish an automated renewal process that leverages the maximum number of data sources for verifying eligibility. Increasing the proportion of renewals that a state conducts electronically — without sending paperwork to beneficiaries — will likely be the most important single step states and CMS can take to avoid coverage losses. When eligibility can't be determined electronically, states should ensure renewal forms are short and populated with the information already on hand. Consumer notices should clearly explain the additional information needed, indicate where and when it should be sent, and provide resources if individuals have questions. Finally, when states find individuals are no longer eligible for Medicaid or CHIP, their information should be electronically forwarded to the state-based or federal marketplace to be evaluated for other coverage.
Minimize returned mail. Address changes are a vexing problem. There is no silver bullet; states should deploy multiple strategies including leveraging existing data sources; conducting outreach through telephone, email, texts, and/or electronic accounts; and partnering with managed care plans, providers, and enrollment assisters.
Continuous Medicaid enrollment has allowed people — including many people of color — to retain coverage and get needed care during the pandemic. When the requirement ends, most people will likely continue to be eligible for either Medicaid or marketplace coverage, but a massive number of renewals will test the system. Every level of government, as well as the health sector and community partners, should help plan to ensure that the end of the public health emergency doesn't push millions of people into the ranks of the uninsured and create even greater health disparities.
1. Based on Manatt analysis of publicly available Medicaid enrollment databases. See also, U.S. Department of Health and Human Services, "New Medicaid and CHIP Enrollment Snapshot Shows Almost 10 million Americans Enrolled in Coverage During the COVID-19 Public Health Emergency," news release, June 21, 2021, which analyzes data through January 2021.
Kinda Serafi, Partner, Manatt Health
Kinda Serafi, Cindy Mann, and Nina Punukollu, "The Risk of Coverage Loss for Medicaid Beneficiaries as the COVID-19 Public Health Emergency Ends," To the Point (blog), Commonwealth Fund, Sept. 23, 2021. https://doi.org/10.26099/zaz5-5z07
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