One Year into Medicaid Unwinding: Where Do We Go Now

Of the 19 million Medicaid enrollees who have had their coverage terminated since March of 2023, nearly 70% were due to procedural reasons, rather than ineligibility, and some were caught in the expensive and time-consuming administrative "Churn." And now, a year into Medicaid unwinding, a new survey from KFF has found that 1 in 4 of those disenrolled are now uninsured.

These coverage losses may have a devastating impact on the lives of those disenrolled that extends beyond health - Medicaid coverage is linked not just to overall better health, but also to improved financial outcomes and housing stability for beneficiaries. Health coverage plays a vital role in determining whether or not people will seek care, and the unwinding is further exacerbating existing disparities, widening the coverage divide across racial and ethnic lines.

So, where do we go from here? How can state Medicaid agencies work to promote continuous coverage, maintain accurate data and oversight, and leverage federal resources to keep state enrollees healthy?

Outdated and Inefficient: Medicaid Data Systems

Even with some states eyeing improvements to address structural pitfalls illuminated by the COVID-19 pandemic, Medicaid agencies still may not have sufficient resources to modernize outdated enrollment and eligibility systems.

Evidence-based strategies exist to promote continuous coverage, including enabling passive ex parte renewals for some beneficiaries, auto-enrolling those who have lost Medicaid coverage in Marketplace coverage and using tax return data to conduct outreach to those who are eligible for Medicaid but unenrolled. However, these strategies often require investment in data system upgrades.

Though the Affordable Care Act (ACA) requires that states "maximize" ex parte renewals, fewer than half (18 of 43) of states reported processing more than 50% of redeterminations through ex parte, largely due to using outdated data systems. For example, a 2019 McKinsey assessment of Missouri's data system for safety net programs found that the system was housed within "a mainframe from 1979 that was not positioned to meet both current and future needs." Soon after, Missouri set out to upgrade data systems to better handle an influx of Medicaid enrollees due to Medicaid expansion in 2021.

Unfortunately, many other states have struggled with digitizing patient health records and streamlining eligibility and enrollment processes using existing technology.

In Crisis: Understaffing at Medicaid Agencies

The unwinding has also highlighted that state Medicaid agencies are overburdened, understaffed, and experience high vacancy rates. These staffing shortages lead to application backlogs, as well as long call center wait times for individuals seeking assistance with eligibility, enrollment and determination processes. This is particularly acute for people who need enrollment support provided in a language other than English. Despite ACA requirements, a number of states do not provide live call center assistance in languages other than English or in formats accessible to people with disabilities. A 2023 survey conducted by the California Health Care Foundation found that 30% of Hispanic households in the state (who are more likely to have members with limited English proficiency than non-Hispanic households) tried but were unable to complete Medicaid renewal forms, compared with 19% of white non-Hispanic households. This can pose a major barrier to maintaining coverage for many Medicaid beneficiaries.

State Medicaid directors have described staff vacancies as one of their greatest challenges. Jeff Nelson, who directs eligibility initiatives for Utah's Medicaid program, stated in January 2022, that nearly a fifth of the state's eligibility workers were brand new and had little experience in processing renewals.

Under-resourced State Medicaid Agencies: We Can't Do More Without More

Though all states have experienced significant numbers of procedural terminations during the unwinding, rates have varied widely, from 22% in Maine to 93% in Nevada. These variations are for policy and resource reasons. Some states have opted to conduct the unwinding in a much shorter timeframe than is federally required or have opted to not take advantage of federal flexibilities that would limit procedural terminations. However, much of the variation comes down to differences in state data systems and technological capabilities. States that have chosen not to make upfront investments in their data systems cannot process renewals automatically by quickly using different data sources, such as Supplemental Nutrition Assistance Program (SNAP) records, tax data and wage information.

As the unwinding unveils preexisting resource challenges in many Medicaid programs, some states are refusing to heed its lessons by slashing bigger holes in Medicaid budgets. However, other states, including Kansas and Wisconsin, have made choices to invest surplus funds from COVID-19 relief, the American Rescue Plan Act (ARPA) and other sources into data system modernization.

Maintaining Coverage: How States Can Leverage Existing Federal Flexibilities

In March 2024, the Centers for Medicare & Medicaid Services (CMS) released a final rule simplifying Medicaid and CHIP eligibility processes, including by reducing unnecessary barriers to enrollment and streamlining the information required. In the same month, CMS also extended the "Special Enrollment Period" for enrollment into Marketplace coverage for individuals who lost Medicaid coverage during the unwinding. This, and other federal administrative flexibilities, can help maintain coverage for Medicaid enrollees without necessarily requiring more labor or resources from already tapped state Medicaid agencies.

States can also apply for Section 1115 waivers to seek CMS approval for several flexibilities that promote continuity of coverage. For example, Oregon has received approval allowing the state to temporarily maintain Medicaid coverage for moderate-income individuals who lost eligibility during the unwinding. The state intends to eventually transition these individuals into a Basic Health Plan.

Other states have also received approval to maintain continuous Medicaid eligibility for children over the course of the first six years of life, and New York has received approval to maintain a year of continuous coverage for adult enrollees, regardless of changes in income or other circumstances.

Call to Action:Now more than ever, our health is intertwined with our neighbor's, we must ensure that everyone continues to have access to medical care and services to ensure a healthy life. This starts with Medicaid. During Medicaid Awareness Month, review and share our resourcesto support Medicaid and ensure those that need it have the access to the care to which they are entitled.

Have you lost Medicaid coverage recently due to the unwinding? We want to hear from you! Please consider sharing your storyto help us fight for better health coverage. You are the voice, the face, and the push behind the policy, your story matters.

Footnotes:

¹ https://www.kff.org/report-section/medicaid-enrollment-and-unwinding-tracker-overview

² https://familiesusa.org/resources/its-time-to-reform-medicaid-eligibility-and-enrollment

³ https://www.kff.org/medicaid/poll-finding/kff-survey-of-medicaid-unwinding/

⁴ https://www.kff.org/mental-health/issue-brief/10-things-to-know-about-medicaid

⁵ https://familiesusa.org/resources/the-untold-toll-of-medicaid-unwinding/

⁶ https://www.hsph.harvard.edu/news/features/the-problem-with-medicaid-unwinding/

⁷ https://kffhealthnews.org/news/article/outdated-information-systems-infrastructure-pandemic-health-technology/

⁸ https://familiesusa.org/wp-content/uploads/2023/04/Redeterminations-Eligibility-Simplification.pdf

⁹ https://www.medicaid.gov/about-us/messages/entry/47649#:~:text=Overall%2C%20CMS'%20annual%20investment%20in,to%20invest%20in%20innovative%20solutions.

¹⁰ https://www.kff.org/medicaid/report/medicaid-and-chip-eligibility-enrollment-and-renewal-policies-as-states-prepare-for-the-unwinding-of-the-pandemic-era-continuous-enrollment-provision

¹¹ https://dss.mo.gov/mhd/mt/docs/mhd-rapid-response-review.pdf

¹² https://themissouritimes.com/missouri-medicaid-data-system-upgrades-on-the-way

¹³ https://missouriindependent.com/2022/02/02/states-like-missouri-look-to-upgrade-glitchy-outdated-health-care-technology/

¹⁴ https://familiesusa.org/resources/its-time-to-reform-medicaid-eligibility-and-enrollment/#:~:text=With%20average%20vacancy%20rates%20of,and%20more%20people%20losing%20coverage.&text=In%202022%2C%20one%20in%20four,had%20vacancy%20rates%20above%2020%25.

¹⁵ https://www.kff.org/medicaid/issue-brief/a-50-state-review-of-access-to-state-medicaid-program-information-for-people-with-limited-english-proficiency-and-or-disabilities-ahead-of-the-phe-unwinding/

¹⁶ https://www.govinfo.gov/content/pkg/FR-2020-06-19/pdf/2020-11758.pdf

¹⁷ https://www.kff.org/medicaid/issue-brief/a-50-state-review-of-access-to-state-medicaid-program-information-for-people-with-limited-english-proficiency-and-or-disabilities-ahead-of-the-phe-unwinding/

¹⁸ https://www.dhcs.ca.gov/dataandstats/Documents/Medi-Cal-Disenrollment-Survey-Month-1-2024.pdf

¹⁹ https://www.npr.org/sections/health-shots/2022/04/04/1089753555/medicaid-labor-crisis

²⁰ https://www.kff.org/report-section/medicaid-enrollment-and-unwinding-tracker-overview/

²¹ https://www.hsph.harvard.edu/news/features/the-problem-with-medicaid-unwinding/

²² hhttps://www.hsph.harvard.edu/news/features/the-problem-with-medicaid-unwinding/

²³ https://www.washingtonpost.com/opinions/2024/04/05/medicaid-unwinding-purge-disenrollment/

²⁴ https://missouriindependent.com/2022/02/02/states-like-missouri-look-to-upgrade-glitchy-outdated-health-care-technology/

²⁵ https://www.cms.gov/newsroom/fact-sheets/streamlining-medicaid-childrens-health-insurance-program-and-basic-health-program-application

²⁶ https://www.medicaid.gov/resources-for-states/downloads/extn-sep-cnsmrs-lsg-chip-cvrg-adndm-faq.pdf

²⁷ https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/or-health-plan-ca-04202023.pd

²⁸ https://www.kff.org/medicaid/issue-brief/medicaid-waiver-tracker-approved-and-pending-section-1115-waivers-by-state/

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