Why Millions Could Lose Medicaid Next Year

Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode!

Dan Gorenstein: In the U.S., Medicaid is a huge part of our social safety net.

And in one of the worst public health and economic crises in history, it did exactly what it was supposed to. 

Matt Salo: We’re at 80 million people covered by Medicaid, which is about 1 in 4 Americans.

DG: But as we slowly make our way out of the pandemic, millions of people stand to lose this safety net as soon as early next year.

Today, what getting kicked off of Medicaid could mean, and the small group of bureaucrats tasked with figuring out how to efficiently and humanely take away health coverage for all those people.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein, and this is Tradeoffs.

Sara Rosenbaum: I am recording. I’ve got the thing on record. Ryan had me set up. 

DG: Sara Rosenbaum is a law professor at the Milken Institute School of Public Health at George Washington University. She’s one of the nation’s top experts on Medicaid.

SR: I can remember one of the first things I wrote as a legal services attorney was a little article back 45 years ago about summary terminations for Medicaid.

DG: Before diving into this so-called Medicaid cliff millions of people are facing, let’s go over some basics. 

DG: Medicaid covers kids, parents, pregnant women, people with disabilities, some older Americans, and in Washington D.C. and the 38 states that have expanded the program, single adults  

The federal government picks up about 60% of the tab. 

States, which each run their own programs, cover the rest. 

In expansion states, Medicaid covers almost anyone who makes up to 138% of the federal poverty level — that’s about $36,000 a year for a family of four.

Because eligibility is usually tied to people’s incomes, coverage can be fleeting and unstable. 

SR: If you had a family with three children and one leaves for college, suddenly your income, even though it didn’t change, may be enough to make you ineligible because now you’re a family of three instead of a family of four. Somebody who was earning low low wages and got a slight wage increase, it can mean the end of your Medicaid.

DG: This is called churn, and, according to one study. it’s why on average, people are only on Medicaid  between 8 and 10 months a year.

But since March 2020, no one has been churning off Medicaid.

Congress banned states from kicking most anyone out during the pandemic if states wanted to receive extra Medicaid money from Washington.

But the ban ends when the federal public health emergency does, which many expect to happen early next year.

This is where that “Medicaid cliff” comes in where we could see the largest concentrated loss of Medicaid coverage in the history of the program. 

SR: We are ending enrollment for a population that was at the heaviest risk from COVID and may be at the greatest risk of long haul COVID. And so it is true that the emergency declaration may be ending. But the health crisis itself is certainly not for these families, and that’s what I think has everybody more on edge because it is so tied to health threats, to threats of illness and death.

DG: Sara, you paint a picture that’s rather concerning. We’re talking about many people in states that have low vaccination rates, that have not expanded Medicaid. What is at stake for people if they lose their coverage?

SR: I would think that the biggest concerns are the people who are COVID survivors and still quite sick and the people getting health care for conditions that make them very susceptible to COVID — health care for diabetes, health care for underlying heart conditions, health care that they really need. Instead of getting some episodic care, they are actually getting ongoing care because they have ongoing insurance, and suddenly that stops and their risk levels at that point may rise.

DG: So here we are. On the one hand, there’s pressure to shrink the rolls as fast as possible because the longer someone’s on the program, the more the state’s going to have to cover those costs. And then, on the other hand, there’s a real, I think, genuine desire, at least in some corners, to end people’s time on Medicaid in the most humane way possible. This is really a tough pull for state Medicaid offices.

SR: Oh it’s terribly difficult. And they really don’t have any choice in the matter because they must do this. This is not something where a state can say, oh, I think I’ll just keep people who are no longer eligible on the program. This is not states acting badly. 

DG: Sara says most people will lose their Medicaid because they got a new job or added back hours, pushing their income above eligibility.

Many of these jobs probably won’t come with health insurance.

In theory, Sara says, states that have expanded Medicaid should be able to transition many of these people into subsidized Obamacare coverage on the exchanges.

In theory.

SR: But with numbers as high as we’re seeing them, it’s going to be very hard for states to sort of pull all the levers they need to: careful redeterminations, coordination with the marketplace, making sure people have help. There’s just so many levers to move at once. It’s very challenging.

DG: Maybe the biggest challenge, says Sara, is how and when states check someone’s eligibility, what’s called “redetermination” in bureaucratese. 

SR: The concern I have is whether states will rely on what I would call stale redeterminations and claim, oh, no, we did a redetermination. There was no other basis of eligibility. And so we closed the file. 

DG: Right now, CMS says states can use information that’s up to 6 months old to kick people off the program.

SR: Because of the sensitivity of people’s living circumstances when you’re this poor, the redetermination really has to be based absolutely on current evidence. And so suddenly states facing 200,000 people that merit a current redetermination is a daunting task. 

DG: Sara says the federal government could help states level out the Medicaid cliff into more of a Medicaid hill. 

The Biden administration could require states to run new, up-to-date redeterminations after the public health emergency ends.

CMS told us it’s standing by the six month rule, but added that it is considering whether to update its guidance. 

And of course, there’s money. 

Congress could extend the additional Medicaid funding they’ve sent states during the pandemic. 

SR: If we’re going to see this at all, it’ll be part of probably whatever year end package Congress puts together. So we don’t really know the answer yet to whether Congress is going to help states let them down easy.

DG: When we come back, we hear from two state Medicaid leaders trying to figure out how to quickly, accurately and fairly remove hundreds of thousands of people from their rolls.

MIDROLL

DG: Welcome back.

To understand how state Medicaid departments are preparing for this unprecedented challenge, we called up two of the people leading these efforts.

Jami Snyder: My name is Jami Snyder. I serve as the director at Access, Arizona’s Medicaid program.

Dave Richard: Dave Richard. I am deputy secretary for Medicaid in North Carolina. 

DG: Between them, Jami and Dave have worked in and around Medicaid for more than 60 years.

But the last year and a half has been shocking. 

JS: It’s sort of like a bomb going off.

DR: You couldn’t stop it. 

DG: The pandemic pushed Jami and Dave to expand telehealth almost overnight so people could keep getting care and upped payments to doctors to help keep the lights on.

And because of the Congressional ban, each watched their programs swell. 

JS: Our enrollment has grown by nearly 360,000.

DR: About 400,000 additional people in North Carolina.

DG: As of today, Jami is responsible for around 2.2 million people on Medicaid in Arizona; Dave, 2.5 million in North Carolina.

Now the two have to figure out how to quickly but fairly remove many of those people.

JS: As it stands now, approximately 300,000 of those individuals will no longer be eligible for Medicaid.

DG: Dave isn’t sure how many North Carolinians are set to lose coverage. It can be a hard number to estimate.

We reached out and asked every state Medicaid program for their own assessment. 

Of the 26 that got back to us, only 8 had number, totalling 1,071,000 people.

Given that, millions of people will likely lose their coverage around the country, which is in line with a very rough estimate from the National Association of Medicaid Directors. 

It’s on Jami, Dave and their colleagues to carry out this unenviable task, caught in a pressure cooker between competing interests: On one hand, the longer ineligible people are on the rolls…the more the state pays.

DR: We want to make sure that what we do is follow the law, that we don’t have people on Medicaid, who do not meet those standards.

JS: We recognize that we have a certain fiduciary responsibility, and we take that seriously. 

DG: And on the other, both have seen what Medicaid coverage has meant in their states. 

JS: Those that we serve have been through a tremendous amount of strain and stress.

DR: People that have had for a year, year and a half coverage that all of a sudden they lose like that is difficult.

DG: Medicaid directors across the country naturally are feeling squeezed.

Though that pinch is acute for Jami and Dave, Medicaid directors in purple states where the politics of the program are particularly contentious.  

Ultimately, who gets kicked off Medicaid — and when — will come down to how state Medicaid office personnel handle this gargantuan bureaucratic process. 

Like Sara Rosenbaum said earlier, redetermination is key. 

Some states have vowed to avoid, borrowing Sara’s language, “stale data” and will only conduct redeterminations after the health emergency ends.

But other states, including Arizona and North Carolina, are worried about dealing with such a big backlog of cases. 

So they’ve continued to run eligibility checks and plan to follow CMS’ guidance allowing them to rely on information that’s up to 6 months old.

DR: The goal being that when the public health emergency ends, we won’t be all of a sudden having to do eligibility determination on four hundred thousand people.

DG: Another critical factor for people losing Medicaid: how well Jami and Dave’s departments help people find a new source of coverage.

In Arizona, as in most expansion states, Jami hopes to move most people into subsidized Obamacare coverage.

JS: We believe that at least 80% will be eligible for marketplace coverage, and it could be a little bit greater than that.

DG: She says people will be notified automatically.

The same will happen in North Carolina, but far fewer will likely qualify since it’s not an expansion state.

Historically, redetermination can be pretty choppy.

People on the program move, paperwork is incomplete or missing, Medicaid workers make mistakes, and eligible people sometimes lose their coverage.

There’s a lot that could go wrong when state Medicaid offices start shedding hundreds of thousands of people. 

DR: Our eligibility system is run by our 100 counties. We oversee it. But again, it’s frankly 100 separate ways in which people are able to fund that and do that work. There are counties that have more money that can do a better job because they can hire more staff, there are counties that have less staff. So all of those kinds of challenges that are there for eligibility workers in the first place.

DG: Medicaid directors know they must move this massive administrative mountain. 

And they must reckon with the fact that more people will be uninsured in their state once they’re done. 

A bitter pill especially after seeing the role health insurance has played in the lives of millions of people during the pandemic. 

JS: About a month or so ago, I received a letter from a gentleman that had moved here from Africa to live with his family, and it took him a couple of years, but ultimately he became a citizen and he was able to enroll and access benefits. And that letter ended by saying, you have saved my life. So that was really, it was that moment. 

DG: What do you mean it was that moment? 

JS: It was that moment when I realized this isn’t about 2.2 million Arizonans, it’s about every single person that we touch. And what a treasure it is to serve in this role and be able to make the difference that we make in the lives of individual people. It’s pretty exceptional.

DG: Jami and Dave know how difficult the task ahead is, how important it is to do right,  and how easy it could get messed up. 

That’s why they and other state Medicaid Directors are lobbying Congress and federal health officials to give them more money, and perhaps most critically, more time. 

DR: The most important thing we can ask for is as much time as possible with these enhanced benefits and as much lead time as possible to know when things will end.

JS: That will allow us to truly engage in a thoughtful unwinding process that’s not harmful to those that we serve.

DG: In other words, time could be the difference between millions of people falling off that Medicaid cliff versus them walking down a Medicaid hill.

I’m Dan Gorenstein, and this is Tradeoffs.