Under federal pressure, 30 states curtail Medicaid unwinding

By Nona Tepper / September 21, 2023

The federal government has ordered a majority of states to pause disenrollments of Medicaid beneficiaries for procedural reasons during the ongoing eligibility redeterminations process, the Health and Human Services Department announced Thursday.

From the start ofMedicaid redeterminations in April through Sept. 20, almost 7.2 million people have been removed from the rolls, more than seven in 10 of them for procedural reasons, such as a state not having current contact information, according to data compiled by KFF. Federal scrutiny has intensified as those numbers mount, leading the Centers for Medicare and Medicaid Services to pressure states to make efforts not to disenroll people who actually qualify for the program.

HHS estimates that 500,000 people who lost Medicaid or Children's Health Insurance Program coverage because of shortcomings in their home states' enrollment systems will regain benefits as a result of the action announced Thursday.

“We will continue to work with states for as long as needed to help prevent anyone eligible for Medicaid or CHIP coverage from being disenrolled," HHS Secretary Xavier Becerra said in a news release.

The Medicaid redeterminations process is meant to cull beneficiaries who no longer qualify because they don't meet income or other eligibility standards. States halted redeterminations during the federal COVID-19 public health emergency in exchange for pandemic relief funding, a requirement that expired along with the emergency declaration. But reports from state Medicaid agencies since the spring have shown a clear pattern of procedural disenrollments outnumbering eligibility disenrollments as they carry out unwinding the pandemic-related continuous coverage requirement.

On Aug. 30, CMS instructed states to determine whether their automatic renewal systems may disenroll qualified beneficiaries despite state governments possessing records demonstrating their eligibility. According to HHS, 29 states and the District of Columbia identified potential problems with auto-renewals and must halt procedural disenrollments until they can promise eligible people will not lose coverage.

The affected jurisdictions are Alaska, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Pennsylvania, Vermont, Virginia, West Virginia, Wisconsin, Wyoming and the District of Columbia. The remaining states, Puerto Rico and the U.S. Virgin Islands are in compliance, according to HHS.

“Addressing this issue with auto-renewals is a critical step to help eligible people keep their Medicaid and CHIP coverage during the renewals process, especially children," CMS Administrator Chiquita Brooks-LaSure said in the news release. "CMS will keep doing everything in our power to help people have the health coverage they need and deserve.”

In addition to enrollees losing coverage because of auto-renewal issues, many have been disqualified for procedural reasons such as failing to respond, or incorrectly responding, to state requests for updated information about their households.

“States are very challenged to make these changes rapidly,” National Association of Medicaid Directors Executive Director Kate McEvoy said during a news conference Thursday. "The eligibility management systems they maintain are complex and it’s costly to revise and pivot them. They also vary significantly between states.”

In addition, CMS offered insufficient guidance about how federal auto-renewal rules apply during Medicaid redeterminations, said Cindy Beane, commissioner of the West Virginia Bureau for Medical Services, which operates Medicaid and CHIP. West Virginia was unaware it was out of compliance until CMS' August outreach, she said at the news conference. “It was never clear this was against the regulation because if it was, we would have been doing it differently a long time ago,” she said.