NC pushes back Medicaid unwinding for kids

The state also is pursuing waivers to protect children further by keeping them enrolled longer before eligibility reviews, reducing the times children may temporarily lose coverage.

By Jennifer Hernandez / December 13, 2023

North Carolina children insured through Medicaid will remain covered for another year as the state works its way through recertifications of everyone on the program.

Health experts praise the move, which they say should help protect children from losing coverage over procedural issues when they would otherwise still be eligible during the process known as the “unwinding,” where states have been disenrolling people who gained Medicaid during the pandemic.

In April 2020, Congress passed a policy preventing states from kicking people off of the Medicaid rolls for the duration of the national public health emergency. That mandate expired this spring. 

North Carolina, which requested a waiver to extend eligibility for children on Oct. 31, is only the second state after Kentucky to be approved. 

“We believe continuing health care coverage for children is not only in the best interest of North Carolina, but it will also help reduce the immediate workload of County DSS staff,” the North Carolina Department of Health and Human Services said in an email, referring to the county Department of Social Services offices, which are handling Medicaid unwinding alongside a massive Medicaid expansion that is expected to add 600,000 beneficiaries in the state. 

The state is also seeking other waivers that would benefit North Carolina children by keeping younger kids continuously enrolled in the program through age 5 and older children enrolled for two years before needing recertification. Another waiver being sought would keep some children who have aged out of foster care enrolled in Medicaid through age 26. Those waivers are pending before the Centers for Medicare and Medicaid Services.

“The big picture in North Carolina right now is pretty good” when it comes to children and Medicaid, said Leo Cuello, a research professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.

‘Unwinding’ ends some children’s enrollment

As with adult enrollment, the number of children covered by North Carolina Medicaid in the state swelled during the pandemic. For kids, enrollment grew from 1,168,602 in March 2020, to 1,382,255 this May.

The continuous coverage requirement allowed beneficiaries to skip Medicaid’s renewal process for about three years during the pandemic. All participants, even those who no longer qualified for the program, were automatically re-enrolled during the period.

North Carolina began the process of “unwinding this excess enrollment,” in June. Before the waiver to extend enrollment was approved, children were subject to being disenrolled during the process.

Nationally, more than 2.8 million children have lost Medicaid coverage since states resumed eligibility reviews. 

Through November, the number of children covered by North Carolina Medicaid has dropped by a little more than 53,000. 

However, the reasons for children losing coverage are not always clear. Some may have lost coverage because the state determined they were no longer eligible, while others may have been disenrolled due to procedural issues, such as their parents not returning paperwork on time, even if they were still eligible.

“Federal researchers prior to this process beginning projected that three out of four kids who lose Medicaid would remain eligible. And that’s a much higher number than what’s expected for adults,” said Joan Alker, executive director and co-founder of the Center for Children and Families, during a November webinar on how unwinding is affecting children across the country. 

Fewer uninsured children

The rate of uninsured children had been steadily declining in the country from 2008 through 2016 before it began rising again.

Advocates say the pandemic-era changes to Medicaid have improved health insurance coverage for children, who make up about half of all program participants.

North Carolina had the fifth largest decline in the number of uninsured children from 2019 to 2022, according to a recent report by Georgetown University’s Center for Children and Families that analyzed the U.S. Census Bureau’s 2022 American Community Survey. 

The state’s rate of uninsured children improved from 5.8 percent to 4.8 percent in that time.

Nationally, the rate is 5.1 percent. The District of Columbia has the lowest rate of uninsured children at 1.4 percent. Texas has the highest rate at 10.9 percent.

Thirty-six states saw a decline in the number and rate of uninsured children.

“Unfortunately, this progress is likely short-lived” because of Medicaid unwinding, Alker said, adding that for children, Medicaid enrollment is “declining rapidly.”

Coverage dropping

During the pandemic, North Carolina’s Medicaid rolls grew from a total of 2.1 million beneficiaries in March 2020 to just under 3 million people qualifying for coverage in May of this year. Enrollment for children through age 18 grew by 213,653 beneficiaries during that time, state data shows.

Through October, DHHS reports 162,138 people in North Carolina have lost coverage as part of the redetermination process. The vast majority, about 87.5 percent, were disenrolled for procedural reasons, such as not returning paperwork.

It’s not clear how many of those are children.

As part of unwinding, states are required to share information on the process. However, only 21 states publicly break down disenrollments by age group, according to KFF, a foundation that focuses on health policy. North Carolina is not one of them.

In those states that do track by age, children accounted for about 4 in 10 disenrollments through Dec. 7, according to KFF’s analysis of data.

North Carolina does break down overall enrollment in Medicaid, including by age group. That dashboard shows there are about 53,000 fewer children covered under the program since unwinding began.

While North Carolina doesn’t track data on children disenrolled during unwinding, NC DHHS noted that “children historically retain coverage at recertification because income thresholds for them are higher and it is uncommon for their eligibility to change.” So, sometimes, even if a parent is not eligible for Medicaid, their children might remain in the program.

Before the COVID-19 public health emergency, “nearly 80% of children retained Medicaid coverage during the recertification process,” NC DHHS said.

One in four children disenrolled typically enroll again within 12 months, NC DHHS said, citing a 2021 study by the Duke Margolis Center for Health Policy.

The study’s authors added, though, that even short lapses in coverage, or “churn,” can have adverse effects on a child’s health.

The effects of ‘churn’ 

“Every day a child spends without coverage is a detriment to their well-being and a serious risk to their health,” pediatrician Valerie Smith said during the Center for Children and Families’ webinar last month.

Smith, who works at a clinic in Tyler, Texas, shared stories of families whose children have lost coverage already during unwinding. One boy newly diagnosed with attention deficit disorder could not get the medicine he needed. Medicaid had helped a young girl survive catastrophic acute kidney failure — but she recently lost coverage, and her mother doesn’t know what they will do if the daughter needs more care for her illness.

“We know that when someone is uninsured, they’re more likely to delay or go without the care they need,” Smith said. “This means that kids might be unable to get follow-up care for injuries and newly diagnosed chronic conditions, or they may be skipping doses of their medication.”

According to the Duke Margolis study, even short disruptions in insurance coverage mean children are “less likely to receive preventive care, and are more likely to seek emergency care for ambulatory conditions.”

Medicaid unwinding could also lead to wider racial and ethnic disparities in health insurance coverage, as children of color make up a disproportionate share of Medicaid enrollment and may face more barriers to staying covered, the Center for Children and Families said. 

“It’s clear that when families have easier access to these programs, health outcomes for young people improve across the board,” Smith said.

Protecting children

In North Carolina, 9 out of 10 people who remain on Medicaid after going through redetermination have been approved through an “ex parte” process. In these cases, the state uses information from various programs to determine eligibility and automatically renews coverage.

The state is best in the nation for ex parte approvals, according to KFF.

That high rate helped minimize the impact on children being disenrolled through procedural determinations, where something as simple as not returning paperwork could lead to a coverage lapse, according to Cuello with the Center for Children and Families.

“Procedural determinations are much more harmful because you’re almost always terminating a kid who was eligible,” he said.

Cuello said the state is doing “a lot of things to reduce the harm.”

He also said the state should be commended for pursuing the various continuous enrollment options, which he called “the real long term solution to drive down the renewal termination rate.”

Alker also pointed to North Carolina as a good example for handling children during unwinding by extending their eligibility for another year. 

“We hope more governors will think about doing that (to) protect children during the process,” she said.