Managing Medicaid changes so people don’t lose health insurance

As changes to Medicaid ramp up this month that could push millions in the U.S. and hundreds of thousands in Wisconsin off the health insurance program for low-income people, a federal official said Wednesday that his agency’s top priority is ensuring that people get through the process without losing health care coverage.

In April, 30 states, including Wisconsin, will require Medicaid recipients to begin annually requalifying for the program for the first time in three years. Dan Tsai, whose job includes overseeing Medicaid, said the federal government is working with states to help them manage the transition smoothly. 

“But our job is also to make sure that our 92 million enrollees currently receive every process right that they’re entitled to, to maintain coverage,” said Tsai, director of the federal Center for Medicaid and CHIP Services. (CHIP is the federal Children’s Health Insurance Program.) Tsai spoke with reporters in an online briefing Wednesday. 

At the start of the COVID-19 pandemic in 2020, Congress passed legislation that boosted Medicaid funds to the states. In return, the legislation required state Medicaid programs to guarantee recipients continuous coverage and suspended a requirement for patients to sign up annually and prove that they qualified. 

The continuous coverage requirement was to remain in effect as long as the federal pandemic health emergency, declared in February 2020. The federal 2023 spending bill enacted at the end of 2022 ended the continuous coverage requirement effective April 1, however, regardless of the health emergency. (The federal government subsequently declared the health emergency would end May 11.)

According to the federal Centers for Medicare & Medicaid Services (CMS), 21 million people have been added to the nation’s Medicaid rolls since February 2020 — a 30% increase. In Wisconsin, the Medicaid rolls grew by 400,000, according to the Wisconsin Department of Health Services (DHS). DHS has not released an estimate of how many people the department believes will be no longer eligible.

Nationwide, Tsai said CMS projects 15.8 million people will leave Medicaid with the resumption of the renewal requirement. 

About 8.6 million are projected to be no longer eligible for Medicaid, primarily because their income exceeds the maximum permitted under the program. About 2.8 million of those are projected to be able to buy health coverage through the federal HealthCare.gov marketplace, with tax credit subsidies that make premiums affordable. 

“Our goal is to help with states [as they] smoothly help people transition to marketplace coverage or employer-sponsored coverage, or Medicare for some folks — really to preserve coverage regardless of where folks are getting coverage,” Tsai said.

Administrative churn

The remaining 7.2 million could lose coverage “due to what we call administrative church,” he added: They haven’t been found to be ineligible, but are removed from the rolls because they have moved and not responded to Medicaid’s renewal notice, because they don’t understand communications telling them to renew, or for some other, similar reason. 

To reduce that risk as much as possible, “We have spent the past year — more than a year — preparing in depth with our state colleagues, with our stakeholders, advocates, providers and others on wanting to preserve coverage,” Tsai said. “This is the most substantial coverage event in the past 10 years in terms of the potential to impact [health] insurance [coverage] rates in the country, and ensuring that we have equity when it comes to coverage.

Eight states began requiring renewals in February and another 16 began in March. Wisconsin is one of 30 states where the requirement took effect in April. The renewals are spread over 12 months, and states are contacting Medicaid recipients to tell them when their renewal date is. 

Depending on the state, the renewal deadline is 60 to 90 days later. Five states — Arizona, Arkansas, Idaho, New Hampshire and South Dakota — could have Medicaid recipients dropped from the program starting this month. In another 16 states, recipients who fail to renew or no longer qualify could lose coverage starting in May. Most other states, including Wisconsin, will begin to see individuals terminated from Medicaid starting in June.

Tsai said that the federal government has been working with state Medicaid agencies on ways to overcome administrative hurdles that keep eligible people from renewing. States are being offered continued additional federal funding during the transition in return for bringing their enrollment practices up to federal requirements. 

For example, federal law since the passage of the Affordable Care Act (ACA) has required states to, whenever possible, establish automatically whether a person enrolled in Medicaid remains qualified. 

“If you can match [an individual’s record] up against data sources like the IRS or your state department of revenue, you can adjudicate someone’s eligibility,” Tsai said. “They don’t even need to get a piece of paper in the mail. You want to maximize that as part of the federal framework for Medicaid determinations.”

Making renewal easier

Some states have been slow to comply with the requirement for automated enrollment redeterminations. Bringing more states into compliance is “one of the most substantial” priorities during the current transition, Tsai said.

According to a March 2023 report from the Georgetown University Center for Children and Families and the Kaiser Family Foundation, Wisconsin processes less than 25% of its Medicaid renewals using the automated procedure without having to get information from the applicant. The same report found that 14 states process at least half of their renewals that way, and four states process 75% or more. 

“There are probably things Wisconsin could do to improve that,” said William Parke-Sutherland, health care policy specialist at Kids Forward, a Madison-based policy and advocacy organization for Wisconsin children and families. “They could look carefully at who are they excluding from the administrative renewal process and if there’s a way to include them.”

In a follow-up email to the Wisconsin Examiner after this story was first published, Jennifer Miller, a DHS media representative, said, “Wisconsin has has had a process in place since 2015 to complete real-time eligibility determinations for members when we are able to verify their information using data exchanges. Since early 2017, we have and continue to use a similar process to complete administrative renewals.”

Miller said that Wisconsin sends renewal forms already partially filled out, with instructions to renewing Medicaid recipients to simply review the information, making corrections or additions as needed, to recipients. 

Miller said that Wisconsin has also been reaching out to Medicaid recipients through their health providers and other contacts to make sure that their contact information is up to date so that they receive notices about renewing their enrollment. DHS hasn’t assembled statistics on response to those messages, she sayd, “but we have seen significant increases in the number of accounts on our ACCESS and MyACCESS (smartphone app) platforms, which members are able to use to update this information and manage their benefits. We will continue to remind members to update their information if it changes throughout the Unwinding period.”

Tsai said that in states that have not accepted Medicaid expansion under the ACA — which enables a state to enroll anyone with incomes up to 138% of the federal poverty guideline — the end of Medicaid continuous coverage will create a “coverage gap.” 

That gap represents people with incomes below the federal poverty line who don’t qualify for Medicaid. They’re also not eligible for the subsidies available for people who buy insurance the health care marketplace, because the subsidies are only available to people with incomes above the federal poverty line. 

In Wisconsin, a federal waiver has allowed single adults without children with incomes up to the poverty line to get Medicaid, or BadgerCare, coverage that they would not qualify for under standard Medicaid rules. 

While that would suggest there’s no coverage gap here, Parke-Sutherland said that it remains. 

People with incomes just above the poverty line qualify for the federal subsidies on the marketplace, he said, but copayments, deductibles and other out-of-pocket expenses that come with the private insurance plans sold there make the insurance unaffordable for them. For that reason, Kids Forward has advocated that Wisconsin accept Medicaid expansion under the ACA.

Update and Correction: This story has been updated with comments from DHS provided after publication and to correct a statement about Wisconsin’s use of partially completed renewal forms for Medicaid recipients.