Biden Administration Begs Red States To Slow Down Their Medicaid Purges

The Biden administration is calling on state officials to slow down reviews of their Medicaid programs that have already reduced enrollment by more than 1 million nationwide and will likely reduce it by several million more in the months to come.

The worry is that many of the people losing Medicaid still qualify under the program’s guidelines, are struggling with cumbersome paperwork requirements and will end up uninsured — although nobody knows for sure how many of the people losing coverage fall into that category or what will happen to each of them as a result.

All of this is happening because of a pandemic-era policy that is expiring.

Under the terms of COVID-19 relief legislation that Congress passed and former President Donald Trump signed in early 2020, the federal government offered states extra money to administer Medicaid, the program that provides health insurance to low-income Americans. In exchange for the bump in funds, states agreed to suspend their usual processes for reviewing Medicaid enrollment — so that, in most cases, anybody who joined or was already on the program got to stay on it.

Now that arrangement is ending. The federal government is ratcheting back its Medicaid funding contribution to the usual, pre-pandemic levels. States, in turn, are resuming their eligibility checks ― a process that will inevitably cause many people to lose the Medicaid coverage they currently have.

But some states are undertaking these reviews more quickly and aggressively than others.

Officials in those states, most of them Republicans, say they are simply taking responsible steps to manage a program that got too big and too expensive during the pandemic — and that now covers too many people who no longer meet the program’s criteria for enrollment.

But large numbers of people in those states are losing coverage simply because of incomplete paperwork, not an independent determination that they are no longer eligible. The Biden administration and other critics see that as a sign that state officials are downsizing their programs too hastily ― and without enough safeguards to protect low-income residents, especially children, who still meet Medicaid eligibility guidelines.

“I am deeply concerned with the number of people unnecessarily losing coverage, especially those who appear to have lost coverage for avoidable reasons that State Medicaid offices have the power to prevent or mitigate,” Xavier Becerra, the secretary of Health and Human Services, wrote in an open letter to governors that his office released on Monday.

Becerra’s letter also included a warning that the federal government would intervene, perhaps suspending the reviews altogether, in states that are moving too hastily. But the letter did not indicate exactly what kind of actions would trigger such intervention, or when it might begin.

A Change In The Rules, A Dramatic Increase In Coverage

The impetus for suspending Medicaid enrollment verification during the pandemic was straightforward.

Lawmakers from both parties recognized that health insurance is especially important during a public health crisis when the need for medical care is so urgent. They also recognized the vital role of government-provided coverage when high unemployment would mean many people losing their job-based benefits.

The changes had a massive effect. Medicaid enrollment swelled, from 64 million people in February 2020 to 85 million as of the end of last year. That made Medicaid a lot more expensive to maintain, but it also meant a lot more people had insurance: During this same span, the percentage of Americans without health insurance fell to 8%, an all-time low.

To many advocates for low-income Americans, it was proof that making it easier to sign up for Medicaid — and then stay on the program — would help get government-provided insurance to people who need it.

Originally, the pandemic-era Medicaid arrangement was going to stay in place until the Biden administration formally ended the COVID-19 public health emergency. Legislation from late last year put a fixed date on the change so that on April 1, the federal government could start reducing its funding contribution level and states could resume eligibility checks.

But that legislation also calls on states to check the rolls carefully, in order to avoid unnecessary coverage losses. States like Oregon have been taking extra steps to do just that — up to the point of changing the rules of their Medicaid programs so that children, in particular, get to stay on the program automatically.

Officials in other states have taken a more aggressive approach, citing the high cost of maintaining swelled Medicaid programs. Florida has already removed approximately 250,000 from its Medicaid program, for example, while Arkansas has removed 110,000.

That got the attention of Senate Finance Chairman Ron Wyden (D-Ore.) and ranking Democratic Energy and Commerce member Frank Pallone (D-N.J.), who last week wrote a letter to the Biden administration seeking more information and raising alarms about what the states are doing.

“These numbers are staggering and suggest excessively high rates of denials on procedural grounds that could severely harm access to care for children,” Wyden and Pallone wrote.

The administration formally responded on Monday with the Becerra letter, which noted that last year’s legislation gave the administration the right to penalize states or to pause enrollment checks if states are not complying with the law’s dictates.

“We take our oversight responsibilities extremely seriously, and while we know that states are working hard to meet the federal requirements, we will not hesitate to use the compliance authority provided by Congress,” Becerra wrote.

A Debate Over The Role Of Medicaid

In Arkansas, Republican Gov. Sarah Huckabee Sanders has touted her state’s determination to clean up its Medicaid program quickly, arguing it’s long past time lawmakers return Medicaid to its role as a more limited, less costly safety-net program.

“This isn’t a bad thing,” she wrote in a Wall Street Journal op-ed that appeared in early May. “Arkansas’s economy is booming. The majority of people who lost their jobs during the pandemic are back at work. Many formerly low-income Arkansans are earning more than ever. It’s time to get them off the path of dependency.”

Her administration has pointed to its outreach efforts, which include social media campaigns and direct contact through mail and text messages, as proof they are not taking the process lightly – a verdict echoed by Brian Blase, a former Trump administration health care official who is now president of the Paragon Health Institute, a right-leaning policy research organization.

“Nationally, Medicaid enrollment swelled by nearly 20 million people as states stopped doing eligibility reviews so it is likely that about that many enrollees are not eligible for Medicaid,” Blase told HuffPost over email. “States like Arkansas and Florida are taking the proper steps and should not be bullied by the HHS Secretary to continue to make payments to health insurers for people who are not Medicaid eligible and likely have other coverage.”

Blase also cited the availability of “retroactive eligibility,” under which people who get onto Medicaid can get coverage for bills that are up to three months old.

“Unfortunately, some people who lose Medicaid because of a failure to respond to the state will remain eligible for the program,” Blase said. “Fortunately for them, Medicaid will still cover the cost of their medical expenses if they were eligible when they incurred them.”

More liberal analysts and advocates for low-income Americans don’t find that especially reassuring, given that some states have dramatically reduced retroactive eligibility. Arkansas and Florida are among them.

And even where retroactive eligibility for three months remains, these analysts and advocates say, it’s not a full substitute for ongoing Medicaid coverage.

“The reality is that when people think they’re uninsured, they avoid care, because they worry about the medical bills that will accrue,” Georgetown University research professor Joan Alker told HuffPost. “And if they’re turned down at the pharmacy for their blood pressure medicine or their child’s asthma inhaler, there is no assurance there that the pharmacist, the pharmacy tech is going to tell them about retroactive ability and they’re going to apply.”

“I’m glad that retroactive eligibility is there in the states that haven’t waived it,” added Alker, who is also director of Georgetown’s Center for Children and Families. “But by no means does it solve the problems created by gaps in coverage, and those problems include avoiding necessary care, chronic conditions worsening, incurring bills, losing school days, losing workdays, etc.”

As for why exactly so many people are losing coverage, and what that means, the best evidence so far is anecdotal — including the stories Politico’s Megan Messerly collected for a new dispatch from Arkansas. The people she interviewed who lost coverage cited problems like an inability to get income information from employers, or state databases with incorrect information.

Some were able to get their coverage back when they complained and appealed. Others weren’t. The best available research suggests that’s pretty typical: Complex enrollment procedures and strict rules can keep ineligible people from getting coverage, but only at the cost of keeping out lots of eligible people, too.

It remains to be seen how states and ultimately the federal government manage those tradeoffs in the coming months — and how many low-income Americans end up uninsured as a result.