A Self-Inflicted Wound: The Looming Loss of Coverage

President Biden recently said that the pandemic is “over.” Regardless of how you feel about that statement or his clarification, it is clear that state and federal health policy is and has been moving in the direction of acting as if the pandemic is indeed over. And with that, a big shoe yet to drop looms large — millions of Americans are about to lose their Medicaid coverage, even though many will still be eligible. This amounts to a self-inflicted wound of lost coverage and a potential crisis for access to healthcare, simply because of paperwork.

An August report from HHS estimated that about 15 million Americans will lose either Medicaid or Children’s Health Insurance Program (CHIP) coverage once the federal COVID-19 public health emergency (PHE) declaration is allowed to expire. Of these 15 million, 8.2 million are projected to be people who no longer qualify for Medicaid or CHIP — but nearly just as many (6.8 million) will become uninsured despite still being eligible.

Why Is This Happening?

This Medicaid “cliff” will happen because the extra funding states have been receiving under the Families First Coronavirus Response Act (FFCRA) since March 2020 was contingent upon keeping everyone enrolled by halting all the bureaucracy that determines whether people are still eligible. Once all the processes to redetermine eligibility resume, the lack of up-to-date contact information, requests for documentation, and other administrative burdens will leave many falling through the cracks. A wrong address, one missed letter, and it all starts to unravel. This will have potentially devastating implications for health.

When Will This Happen?

HHS has said they will provide 60 days’ notice to states before any termination or expiration of the PHE — and they haven’t done so yet. It also seems incredibly unlikely that they would announce an end date for the PHE before the midterm elections, as that would be a major self-inflicted political wound. So, odds are that we are safe until at least January 2023 — but extensions beyond that feel less certain.

What Are States Doing to Prepare?

CMS has issued a slew of guidance over the past year to help states prepare for the end of the PHE and minimize churn, another word for when people lose coverage. Some of this guidance has included ways to work with managed care plans, which deliver benefits to more than 70% of Medicaid enrollees, to obtain up-to-date beneficiary contact information, and methods of conducting outreach and providing support to enrollees during the redetermination process.

However, the end of the PHE and the Medicaid redetermination process will largely be a state-by-state story. Georgetown University’s Center for Children and Families has been tracking how states are preparing for the unwinding process. Unsurprisingly, there is considerable variation between states’ plans, outreach efforts, and the types of information accessible to people looking to renew their coverage. For example, less than half of all states have a publicly available plan for how the redetermination process will occur. While CMS has encouraged states to develop plans, they are not required to submit their plans to CMS and there is no public reporting requirement.

Who Will Be Hurt Most?

If you dig into the HHS report, you will see that the disenrollment cliff will likely be a disaster for health equity — as if the inequities of the pandemic itself weren’t enough. A majority of those projected to lose coverage are non-white and/or Latinx, making up 52% of those losing coverage because of changes in eligibility and 61% among those losing coverage because of administrative burdens. Only 17% of white non-Latinx are projected to be disenrolled inappropriately, compared to 40% of Black non-Latinx, 51% of Asian American, Native Hawaiian, and Pacific Islander, and 64% of Latinx people — a very grim picture. This represents a disproportionate burden of coverage loss, when still eligible, among those already bearing inequitable burdens of the pandemic and systemic racism more generally.

Another key population at risk are seniors and people with disabilities who have Medicaid coverage, or those who aren’t part of the Modified Adjusted Gross Income (MAGI) population. Under the Affordable Care Act, states are required to redetermine eligibility at renewal using available data. This process, known as ex parte renewal, prevents enrollees from having to respond to, and potentially missing, onerous re-enrollment notifications and forms. Despite federal requirements, not all states attempt to conduct ex parte renewals for seniors and people with disabilities who have Medicaid coverage, or those who aren’t qualifying based on income. Excluding these groups from the ex parte process has important health equity implications, leaving already vulnerable groups more exposed and at risk for having their coverage inappropriately terminated.

What Can Be Done?

There are ways to mitigate some of this coverage loss and ensure people have continued access to care. HHS recently released a proposed rule that would simplify the application for Medicaid by shifting more of the burden of the application and renewal processes onto the government as opposed to those trying to enroll or renew their coverage. We could also change the rules to allow states to use more data, like information collected to verify eligibility for the Supplemental Nutrition Assistance Program (SNAP), in making renewal decisions, rather than relying so much on income. The Biden administration also made significant investments into navigator organizations, which can help those who are no longer eligible for Medicaid transition to marketplace coverage. Furthermore, states should use this as an opportunity to determine the most effective ways to reach Medicaid enrollees by partnering with researchers to test different communication methods surrounding renewals and redeterminations.

As the federal government and state Medicaid agencies continue to prepare for the end of the PHE, it is critical that they consider who these burdensome processes will affect the most and how to improve them to prevent people from falling through the cracks. More sick Americans without access to care is the last thing we need.

Paul Shafer, PhD, is an assistant professor in the Department of Health Law, Policy, and Management at Boston University. Gabriella Aboulafia is an MPP candidate at Harvard University.