The ‘Massive’ Task Awaiting State Medicaid Agencies

State Medicaid officials around the country are growing increasingly worried about the mammoth and high stakes task of reevaluating who among roughly 80 million people will still be eligible for Medicaid when the Biden administration declares the national Covid-19 public health emergency to be over—a move expected in July.

With health advocates and state officials acknowledging a lot could go wrong, they are worried people will be mistakenly thrown off of the program, which provides health coverage to low-income Americans.

“It’s a pretty massive undertaking for us,” Nicole Comeaux, New Mexico’s Medicaid director said in an interview. “Really our goal is that everybody stays in the coverage who are eligible for it.” 

On top of that challenge, state officials face added pressure because the end of the public health emergency, which began in January 2020, would mean roughly $90 billion a year in increased federal Medicaid funding states have been receiving would suddenly screech to a halt. That could happen as soon as the end of September.

Earlier in the pandemic, Congress and the Trump administration increased the federal government’s share of paying for Medicaid, known as the Federal Medical Assistance Percentage, or FMAP, by 6.2%. The move was a response to people losing health care coverage from their jobs in the early days of the pandemic. 

In return for getting the extra money, approved in the March 2020 pandemic relief law known as the Families First Coronavirus Response Act, states were barred from removing anyone from their Medicaid rolls. 

Meanwhile, the number of people enrolled in Medicaid and the related Children’s Health Insurance Program grew from 70.7 million in February 2020 to 84.8 million last September, according to federal figures.

When the public health emergency ends, Medicaid offices will have to return to determining whether everyone on the rolls is eligible—except with a lot more people to check compared to before the pandemic. 

Recognizing the size of the task, the Centers for Medicare & Medicaid Services in March gave states up to 14 months after the end of the emergency declaration to reevaluate enrollees. But the rub for state budgets is that the increased federal help will have disappeared long before the end of those 14 months.That means it could make sense for them to get their Medicaid rolls in order ahead of the deadline. 

“All states are weighing trade-offs about how to sequence out all that,” Matt Salo, executive director of the National Association of Medicaid Directors, said in an interview, describing states’ plans for the looming changes.

To ease some pressure, Salo said state Medicaid directors are asking Congress to extend the additional FMAP funding for the 14 months states have to do the reevaluations.

Complicating things for states further is that it’s not known for sure when the Biden administration will declare the emergency to be over.

'Millions of People Could Lose Coverage'

According to a January survey of state Medicaid officials by the Kaiser Family Foundation and the Georgetown Center for Children and Families, three states will try to complete the reevaluations in less than six months, four in six to nine months and 41 in nine to 12 months.

Estimates from a separate Urban Institute report show that about 15 million people will be declared ineligible for Medicaid in the coming months—many for legitimate reasons like having found a job. Medicaid officials in the KFF and Georgetown survey estimated that 13% of people in the program will be declared ineligible, but the estimates vary between 8% to nearly a third from state to state.

Determining eligibility can be complicated for a number of reasons.

Medicaid officials and health experts acknowledge that notices asking people to verify their income and other information can get lost in the mail. Addresses and phone numbers for enrollees can be out of date. There can also be language barriers. And state Medicaid offices, in many cases, will have to do the work while they are dealing with staff shortages.  Many new workers will be doing eligibility redeterminations for the first time. 

“Millions of people could lose coverage if they are no longer eligible, or face barriers in the renewal process even if they remain eligible for Medicaid coverage,” Kaiser Family Foundation vice president Robin Rudowitz said last week during a webinar by the health care policy organization.

“Key policy choices in addition to implementation strategies will vary from state to state and these choices will have major implications for Medicaid enrollment,” added Rudowitz, head of KFF’s Medicaid and uninsured policy studies.

Lorelei Kellogg, deputy director of the New Mexico Medical Assistance Division, said during the webinar that the administrative burden with the requirement to complete the recertifications would be “pretty significant.”

The months ahead are likely to be stressful for many program enrollees and Medicaid agencies. Once Medicaid recipients start learning they might lose their coverage, “there’s a potential that people are going to panic,” Kellogg said. “They’re going to be calling our call centers. They don’t want to lose their Medicaid.”

Black and Latino enrollees are particularly at risk of having a difficult time with the process, according to the Urban Institute report, which looked at the plans of 11 states. They are more likely to lose housing, leading to address and phone number changes that can cause difficulties reaching them. 

Colorado, like many states, has budgeted for the loss of the additional federal dollars sometime this year, but the funding assumes people will be dropped off Medicaid a year after the federal funding dries up.

The state’s Department of Health Care Policy & Financing is planning to finish reevaluating enrollment in 14 months, leaving them under less of a time crunch to remove people from Medicaid and giving people who are unenrolled more time to find other coverage, including from Affordable Care Act subsidized insurance, said department spokesman Marc Williams.

The state is asking Congress to stretch the extra financial help for at least one fiscal quarter after the end of the public health emergency. Currently, the higher FMAP ends at the end of the quarter when the emergency is declared over. If that occurs in July, the money will run out in September. Continuing the higher FMAP for another four months would mean $100 million for Colorado.

Extending the federal help “means that we are under less pressure to disenroll people quickly and can utilize the full 14 months time period that CMS has allowed,” Williams said.

Pandemic Initiatives Winding Down

But with this year’s elections approaching and much of the nation weary from over two years of dealing with Covid-19, political momentum is shifting away from pandemic-era initiatives and precautions. More than 70 House Republicans wrote Biden in February urging him to end the emergency declaration. Democratic governors are moving toward lifting mask mandates. 

The administration signaled in February that it wants to begin treating Covid-19 as endemic. "We're moving toward a time when Covid won't disrupt our daily lives, a time when Covid won't be a constant crisis but rather will be something we can protect against and treat," Jeffrey Zients, the White House Covid response coordinator, said in a briefing.

Health and Human Services Secretary Xavier Becerra in January extended the emergency declaration until April 15. 

The administration has said it would give states 60 days notice before ending the emergency. And since the heads up hasn’t come yet, health experts expect Becerra to extend the declaration a final time in April for another 90 days, said Sabrina Corlette, codirector of Georgetown University’s Center on Health Insurance Reforms. 

Salo agreed. “I think there’s going to be one more extension, and that’s it,” he said. 

But on the other hand, Covid-19 cases in Europe, which have been a signal of what’s to come in the United States, are spiking, noted Jennifer Tolbert, KFF’s director of state health reform. 

“There’s lots of uncertainty and it makes it really hard to plan if you’re a state official,” Corlette said.

Indeed, according to the survey of Medicaid officials, even with time ticking down, only 27 states have finalized their plans for how to deal with returning to normal operations.

Florida, for instance, answered in the KFF and Georgetown survey that it hasn’t decided whether to turn down the increased federal dollars even before the end of the public health emergency, a move that would mean beginning to reevaluate its enrollees sooner.

“Some of the confusion is the fact that we don’t know what we're going to do,” Jodi Ray, director of Florida Covering Kids and Families, said during the KFF webinar. “The more informed we are on the ground, the more we can help people who have to go through the processes,” added Ray, whose program, affiliated with the University of South Florida’s College of Public Health, works to enroll the uninsured into health care programs. 

Deciding How to Prioritize Reevaluations

Among the decisions states are having to make is who to reevaluate first and possibly remove from Medicaid. 

Eleven states, according to the KFF and Georgetown survey, will first reevaluate enrollees who, based on other government data, may no longer be eligible. Eight states are planning to order the redeterminations based on when people would have been subject to reevaluation anyway, while eight other states are planning a combination of the two approaches. According to the Urban Institute survey, at least one state said it would first target those who were not using their Medicaid. 

Medicaid directors in most states said they are taking steps to try to avoid removing people who are eligible for coverage. 

Though states are not required to follow up with people who do not respond to a request for information before terminating them from the program, 41 states are planning to reach out if they do not hear back.

Forty-six states are planning to update mailing addresses, such as through using the U.S. Postal Service’s change of address database and checking with the information medical providers have. When mail to a Medicaid enrollee is returned, 35 states said they will try to find them before cutting off their coverage.

The survey also found that 30 states are planning to add staff to do the redeterminations.

But the Urban Institute study suggests that some Medicaid directors are struggling to determine when to begin adding staff, given the uncertainty over when redeterminations will ramp up. “We don’t want a lot of people sitting around with nothing to do,” one official said, according to the report.