Millions risk losing Medicaid under the federal $1.7 trillion spending bill this spring

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

Medicaid enrollment surged 30% to more than 83 million people during the pandemic after Congress prohibited states in principle from putting people out of the program for the duration of the state health emergency declared in response to Covid.

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

“As of April 1, Medicaid agencies rescheduling individuals 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. “Whereas currently, since the start of the Covid-19 health emergency, states have not been allowed to end Medicaid coverage.”

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

The public health emergency, first declared by the Trump administration in January 2020, has been renewed every 90 days since the pandemic began. The powers activated by the emergency declaration had a huge impact on the US health care system, allowing hospitals to act more quickly if infections rose and Medicaid keeping millions enrolled in its public health plan.

The Department of Health and Human Services estimates that about 15 million people will lose Medicaid coverage once registration protections expire and states review individuals’ eligibility using criteria used before the pandemic. Medicaid is the federal insurance program for the poor and those who lose their health insurance because a disability prevents them from working.

“It’s important to contextualize that losing Medicaid coverage doesn’t necessarily mean losing health insurance,” Rollins said. “Many of these people will move to other sources of reporting.”

People generally lose Medicaid protection as their income increases and falls outside of the program’s parameters. Rollins said most people who are deregistered for this reason from April will likely move on to coverage in Affordable Care Act marketplaces. HHS estimates that about a third of those who lose Medicaid protection are eligible for market insurance tax credits.

However, some individuals are opted out while still being eligible for Medicaid due to, among other reasons, either not receiving their renewal notice, failing to provide the documentation required by the state, or failing to submit the documentation by the deadline. HHS has estimated that 6.8 million people will lose Medicaid coverage despite remaining eligible for the program

“There has to be a process to renew coverage or reassess coverage and opt out of people who are no longer eligible,” said Jennifer Tolbert, Medicaid expert at the Kaiser Family Foundation.

“The key is to do this in a way that minimizes potential coverage losses for people who remain eligible,” Tolbert said.

The legislation requires states to make a good faith effort to contact the person being verified through more than one method of communication. States cannot terminate an individual’s Medicaid coverage based solely on returns of mail in response to public relations.

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

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

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

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

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