Paperwork problems drive a surge in people losing Medicaid health coverage

The nation's top health official implored states to do more to keep lower-income residents enrolled in Medicaid, as the Biden administration released figures Friday confirming that many who had health coverage during the coronavirus pandemic are now losing it.

Though a decline in Medicaid coverage was expected, health officials are raising concerns about the large numbers of people being dropped from the rolls for failing to return forms or follow procedures.

In 18 states that began a post-pandemic review of their Medicaid rolls in April, health coverage was continued for about 1 million recipients and terminated for 715,000. Of those dropped, 4 in 5 were for procedural reasons, according to newly released data from the federal Centers for Medicare and Medicaid Services.

Health and Human Services Secretary Xavier Becerra sent a letter Friday to all governors encouraging them to bolster efforts to retain people on Medicaid. He particularly encouraged them to use electronic information from other federal programs, such as food stamps, to automatically confirm people's eligibility for Medicaid. That would avert the need to mail and return documents.

“I am deeply concerned about high rates of procedural terminations due to ‘red tape’ and other paperwork issues,” Becerra told governors.

During the pandemic, states were prohibited from ending people’s Medicaid coverage. As a result, Medicaid enrollment swelled by nearly one-third, from 71 million people in February 2020 to 93 million in February 2023. The prohibition on trimming rolls ended in April, and states now have resumed annual eligibility redeterminations that had been required before the pandemic.

The new federal data captures only the first month of state Medicaid reviews from states that acted the most expeditiously. Since then, additional states also have submitted reports on those renewed and dropped from Medicaid in May and June.

Though the federal government hasn't released data from the most recent reports, information gathered by The Associated Press and health care advocacy groups show that about 3.7 million people already have lost Medicaid coverage. That includes about 500,000 in Texas, around 400,000 in Florida and 225,000 in California. Of those who lost coverage, 89% were for procedural reasons in California, 81% in Texas and 59% in Florida, according to the AP's data.

Many of those people may have still been eligible for Medicaid, “but they’re caught in a bureaucratic nightmare of confusing forms, notices sent to wrong addresses and other errors,” said Michelle Levander, founding director of the Center for Health Journalism at the University of Southern California,

Top CMS officials said they have worked with several states to pause Medicaid removals and improve procedures for determining eligibility.

South Carolina, for example, reported renewing Medicaid coverage for about 27,000 people in May while removing 118,000. Of those dropped, 95% were for procedural reasons. In a recent report to the federal government, South Carolina said it removed no one from Medicaid in June because it extended the eligibility renewal deadline from 60 days to 90 days.

Michigan reported renewing more than 103,000 Medicaid recipients in June and removing just 12,000. It told the federal government that the state opted to delay terminations for those who failed to respond to renewal requests while instead making additional outreach attempts. As a result, the state reported more than 100,000 people whose June eligibility cases remained incomplete.

People who are dropped from Medicaid can regain coverage retroactively if they submit information within 90 days proving their eligibility. But some advocacy groups say that still poses a challenge.

“State government is not necessarily nimble,” said Keesa Smith, executive director of Arkansas Advocates for Children and Families. "When individuals are being disenrolled, the biggest concern ... is that there is not a fast track to get those individuals back on the rolls.”

Arkansas officials have been at the forefront of defending Medicaid cuts. They contend that many people likely don't return forms because they no longer need Medicaid.

People are “transitioning off of Medicaid” because "they are working, making more money, and have access to health care through their employers or the federal marketplace,” Arkansas Medicaid Director Janet Mann said earlier this month. “This should be celebrated, not criticized.”

Insurance companies that run Medicaid programs for states said they are trying to reduce procedural terminations and enroll people in new plans.

The Blue Cross-Blue Shield insurer Elevance Health lost 130,000 Medicaid customers during the recently completed second quarter, as Medicaid eligibility redeterminations began. Chief Financial Officer John Gallina said earlier this month that many people lost Medicaid coverage for administrative reasons but are likely to reenroll in the near future.

Leaders of the insurer Molina Healthcare told analysts Thursday that the company lost about 93,000 Medicaid customers in the recently completed second quarter, mostly due to eligibility redeterminations. Molina officials said they are trying to switch people who no longer qualify for Medicaid to one of the individual insurance plans they sell through state-based marketplaces.

Federal data for April indicates that some states did a better job than others at handling a crush of questions from people about their Medicaid coverage.

In 19 states and the District of Columbia, the average Medicaid call center wait time was 1 minute or less in April. But in Idaho, the average caller to the state's Medicaid help line waited 51 minutes. In Missouri, the average wait was 44 minutes, and in Florida 40 minutes.

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