20M fewer Medicaid enrollees means trouble for providers
By Nona Tepper / April 23, 2024
Over the past year, states have removed more than 20 million beneficiaries from Medicaid after suspending eligibility redeterminations during the COVID-19 public health emergency. Thousands of those people are Clinica Family Health patients.
The Lafayette, Colorado-based community health center felt the pain of lost reimbursements when patients went from having Medicaid coverage to being uninsured, a fate that has befallen almost one-fourth of these former Medicaid enrollees nationwide, according to KFF. Clinica Family Health responded with cutbacks but is still in the hole.
Clinica Family Health President and CEO Simon Smith said unwinding the Medicaid continuous coverage provisions from pandemic relief programs caused 35% of its patients, or 13,000 people, to lose benefits. The federally qualified health center now sees more uninsured people than Medicaid beneficiaries, he said.
Since October, Clinica Family Health has closed a dental clinic and a home health program, ended walk-in clinic services, and laid off employees, Smith said. Those steps saved the community health center $6 million, but it still faces a $100,000 monthly shortfall, he said.
“It's really hard to keep up, to be perfectly honest,” Smith said. “It's really hard to keep staff motivated.”
This scenario is playing out at healthcare providers across the country, from Colorado to South Dakota to Texas.
Last April, states began the complex and fraught process of determining who was enrolled in Medicaid but no longer met the program's eligibility requirements and needed to be dropped.
As a result, according to KFF, 20.3 million people who used to have Medicaid no longer do — 5 million more than the Health and Human Services Department projected last year. Children made up 37% of those who lost coverage, KFF reported.
There were more than 94 million people on Medicaid or the Children's Health Insurance Program in March 2023, federal data compiled by KFF show. By December, that number had fallen below 78 million, as new enrollments partially offset disenrollments.
Moreover, only 25% of former Medicaid enrollees found replacement coverage via health insurance exchanges such as HealthCare.gov and Connect for Health Colorado, the Georgetown University Center for Children and Families reported April 11.
The Centers for Medicare and Medicaid Services reacted to this unfolding trend with alarm last year, and urged states to take advantage of flexibilities in the law that allow them to be more more circumspect when reviewing their Medicaid rolls. For example, states are permitted to use personal and financial information from other government programs to determine Medicaid eligibility.
The agency even ordered 30 states to pause redeterminations in September and threatened to withhold Medicaid funding from any state that deviated from federal rules. Yet the numbers continue to mount.
"In many cases, the states have worked closely with us and cooperated. Unfortunately, some states have not taken up the flexibilities [and] have not shown that they are interested in moving forward," HHS Secretary Xavier Becerra said at a House Energy and Commerce Committee hearing last Wednesday.
Dwindling Medicaid rolls
More than half of Medicaid enrollees up for renewal in Utah, Montana, South Dakota, Oklahoma, Idaho and Georgia have lost benefits since unwinding began, KFF reported Friday. By contrast, Medicaid authorities in Maine, North Carolina, Oregon, the District of Columbia and Connecticut have removed fewer than 20% of such beneficiaries.
The number of disenrollments overshot predictions in part because 69% of them have been "procedural" in nature, according to KFF. That means states never affirmed those enrollees were ineligible, but instead removed people for procedural reasons, such as being unable to contact them or to update records about their residency, income and other factors.
Nationwide, 53% of people who had Medicaid before redeterminations resumed heard “a little” or “nothing at all” about the process, according to a survey KFF conducted in February and March.
In Nevada, New Mexico and Utah, procedural disenrollments accounted for more than 90% of those removed from the program. Maine, New York, Kentucky, South Dakota and Nebraska are the only states where ineligibility, not procedural reasons, caused the majority of disenrollments.
Providers and health insurance companies credited CMS for its efforts to soften the blow and blamed state officials for the huge number of Medicaid disenrollments. State regulators countered that they have followed the letter of the law.
“We're in full compliance with all regulations that CMS gave us," said South Dakota Department of Social Services Secretary Matt Althoff. "We followed our plan. However we stack up against other states, that isn't why we do what we do. That's not what our focus is.”
South Dakota disenrolled 55% of the Medicaid beneficiaries it reviewed, tied with Montana and Oklahoma for the second-highest rate behind 56% in Utah, KFF reported. South Dakota wrapped up redeterminations this month, but most states will continue into May.
Utah hospitals are assisting former Medicaid enrollees who need replacement coverage after the state removed more people than expected, said Francis Gibson, president and CEO of the Utah Hospital Association. “Could the state have done a better job? Yes,” he said. The Utah Department of Health and Human Services declined to comment.
Health insurance companies that administer Medicaid benefits, such as Centene and Molina Healthcare, have reported higher-than-expected coverage loses and warned that their risk pools are less healthy than before the unwinding. “Churn is back into the space, and no insurance company likes churn,” said Medicaid Health Plans of America President and CEO Craig Kennedy.
Uncompensated care
People who lose Medicaid are still people and need medical care. Seventy-five percent of those removed from the program told KFF they are "very worried" or "somewhat worried" about their physical health since being disenrolled, and 60% expressed worry about their mental health.
Providers are bearing the financial burden.
When community health centers such as Clinica Family Health cut back, it drives uninsured patients to hospitals. The share of hospital patients categorized as cash-pay rose 1.5% for inpatient care and 2.4% for emergency care between March and August 2023, Epic Research, a division of the electronic health records company, reported in November.
In Colorado — where Medicaid is known as Health First Colorado — the share of emergency department patients without health coverage jumped from 6.6% before redeterminations to 10% at the end of last year, according to the Colorado Hospital Association.
The Colorado Hospital Association believes the state could have done better, said Tom Rennell, senior vice president of financial policy and data analytics. Colorado was slow to adopt federal waivers and implement automatic renewals, for instance, he said. Colorado has removed 48% of those subject to Medicaid redeterminations, the eighth-highest rate among states.
“Our outcomes are worse than many other states and those are the results of local policy decisions and execution. It’s very disappointing that, as a state, we cannot come together to help our residents,” Rennell said.
The National Health Law Program sued state Medicaid agencies in Colorado, Florida, Texas and the District of Columbia, alleging their redeterminations processes improperly removed people from coverage.
None of these state except Texas responded to interview requests.
“We are actively working on additional opportunities to further streamline and automate our eligibility processes,” a spokesperson for the Texas Health and Human Services Commission wrote in an email.
More than 2 million Texas Medicaid enrollees lost benefits during redeterminations, according to KFF. That's 49% of its redeterminations cases and the highest total number among the states.
Federally qualified health centers in Texas consequently took a hit, said Jana Eubank, executive director of the Texas Association of Community Health Centers. Medicaid coverage loses caused average community health center revenue to decline $135 million, she said. Texas community health centers responded with layoffs and service cuts, and some executives went without pay, she said.
“Nationally, there's been some winners and some losers, and unfortunately Texas has been one of those states that have performed really poorly,” Eubank said.
Texas did not undertake a public outreach campaign to warn Medicaid enrollees that their coverage was at risk or advise them on how to find alternatives, Eubank said. Furthermore, the state's online portal doesn't allow users to reset passwords, which contributed to long wait times at call centers, she said.
Nearly six in 10 people subject to redeterminations encountered at least one problem attempting to renew, and hold times topped the list, according to the KFF survey.
Becerra said HHS has strived to make the process as easy as possible for states but may have to take a firmer hand.
"Many states have not made sufficient investments to really address the populations applying, and so we'll continue to work with them," Becerra said at the hearing. “We hope that we don’t have to move towards enforcement but we will do so if it means that that’s the only way to protect people in getting the Medicaid they’re entitled to.”