Millions at risk of losing Medicaid in spring under $1.7 trillion federal spending bill

Millions of people who enrolled in the public health insurance program Medicaid during the Covid pandemic could lose their coverage in the spring if their state decides they no longer meet the program’s eligibility requirements.

Medicaid enrollment jumped 30% to more than 83 million people during the pandemic after Congress effectively barred states from kicking people out of the program during the federal public health emergency declared in response to Covid.

In a more than 4,000-page, $1.7 trillion bill that funds the federal government through September is a provision that would remove Medicaid coverage protections from the public health emergency. Instead, states can begin ending coverage for recipients in April 2023 if they no longer meet the program’s eligibility criteria.

“Effective April 1, Medicaid agencies re-designating people enrolled in the program may result in termination of Medicaid coverage,” said Jack Rollins, director of federal policy at the National Association of Medicaid Directors. “Until right now, since the Covid-19 public health emergency began, states have not been allowed to end Medicaid coverage.”

Congress must pass the legislation by Friday to avoid a government shutdown.

The public health emergency, first declared in January 2020 by the Trump administration, has been renewed every 90 days since the start of the pandemic. The powers enabled by the emergency declaration have had a huge impact on the US health care system, allowing hospitals to act more nimbly when infections spike and Medicaid to support millions enrolled in its public health insurance.

The Department of Health and Human Services has estimated that about 15 million people will lose coverage through Medicaid after enrollment protections are no longer in place and states review individuals’ eligibility based on criteria used before the pandemic. Medicaid is the federal insurance program for the poor and those who lose their health insurance because they cannot work because of a disability.

“It’s important to contextualize that losing Medicaid coverage does not necessarily mean losing health insurance coverage,” Rollins said. “Many of these people will switch to other sources of coverage.”

People typically lose Medicaid coverage if their income rises or falls outside the program’s parameters. Rollins said most people who are excluded for that reason starting in April will likely switch to coverage in the Affordable Care Act marketplaces. HHS estimates that about one-third of those who will lose Medicaid coverage will qualify for tax credits for marketplace insurance.

But some people are disenrolled even though they remain eligible for Medicaid because they either don’t receive their renewal notice, can’t provide documentation required by the state, or don’t file by the deadline, among other reasons. HHS estimated that 6.8 million people would lose Medicaid coverage even though they remained eligible for the program

“There needs to be a process to renew coverage or redefine coverage and disenroll people who are no longer eligible,” said Jennifer Tolbert, a Medicaid expert at the Kaiser Family Foundation.

“The key is to do this in a way that minimizes to an extent possible coverage losses among people who remain eligible,” Tolbert said.

The legislation requires states to make a good faith effort to contact the person whose eligibility is being reviewed by more than one method of communication. States cannot terminate someone’s Medicaid coverage based solely on returned mail in response to outreach efforts.

“We’re trying to make sure states have the most up-to-date contact information for their enrollees,” Rollins said. “Because we know that without accurate contact information, it increases the likelihood of an inappropriate or unnecessary loss of coverage, and that’s something we’re working to avoid.”

Republican governors on Monday urged the Biden administration to end the Covid public health emergency in April so their states can begin disenrolling people who no longer meet Medicaid eligibility requirements, arguing that the cost of greater enrollment in the program are too high.

However, Tolbert said KFF found states spent about $47 billion to cover additional Medicaid enrollees through September 2022 while receiving $100 billion in federal funds.

“The cost was more than covered by the increased federal funding,” Tolbert said.

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