Surge In People Losing Medicaid Due to Red Tape, Officials Warn

Xavier Becerra, secretary of Health and Human Services (HHS), speaks during a press conference at the HHS headquarters in Washington, on June 28, 2022. (Nicholas Kamm/AFP via Getty Images)

Biden administration officials are sounding the alarm over large numbers of people being dropped from Medicaid rolls due to paperwork issues like failing to return forms or follow procedures.

Newly released data from the federal Centers for Medicare and Medicaid Services, which is reported with a lag, shows that in 18 states that began a post-pandemic review of their Medicaid rolls in April, health coverage was terminated for around 715,000 people.

Of these, around 79 percent were for “procedural reasons,” meaning they did not return the renewal form that they received in the mail or the state was unable to reach such individuals. Nearly 21 percent lost their Medicaid coverage because they were deemed to be ineligible.

The latest federal data, which is reported with a lag, only covers April. However, health care advocacy groups like the Kaiser Family Foundation (KFF) estimate that at least 3.8 million Medicaid enrollees have been disenrolled as of July 28.

‘Red Tape’

A decline in Medicaid coverage was widely expected because states were prohibited from ending people’s Medicaid coverage during the pandemic, when enrollment swelled. Between February 2020 and February 2023, Medicaid enrollment jumped from 71 million to 93 million people.

But the ban on disenrollment ended in April 2023, and states have resumed the standard annual redeterminations that were a staple of pre-pandemic times.

As states unwind the continuous enrollment provision, KF estimated that 15-18 million in total could lose their Medicaid coverage over the coming year.

Since April, health officials have repeatedly raised concerns about the large number of Medicaid dropoffs, most recently on Friday.

“I am deeply concerned about high rates of procedural terminations due to ‘red tape’ and other paperwork issues,” Health and Human Services Secretary Xavier Becerra wrote in a letter on July 28 to all governors, encouraging them to take steps to keep people on the rolls.

In particular, Mr. Becerra encouraged the governors to use information from other federal programs, such as food stamps, to automatically confirm people’s eligibility for Medicaid, averting the need to mail and return documents.

Under federal rules, most people have 90 days from the day they lost their Medicaid coverage to submit any missing information and potentially have their coverage reinstated.

In a similar letter sent to governors in mid-June, Mr. Becerra said it’s “critically important” that people don’t lose their Medicaid coverage due “solely to administrative processes.”

At the time, he urged governors to “adopt all options” to help eligible individuals maintain their coverage, including by adopting a range of new policy options.

Some states have adopted policies that are more likely to promote continued coverage among eligible enrollees, including automating their eligibility systems in order to process renewals more easily and accurately.

These policies fall into three broad categories: renewal policies, systems for processing renewals, and eligibility policies that promote coverage, according to a KFF tracker.

Nine states meet eight or more out of nine metrics for promoting continuity of coverage: Colorado, Illinois, Indiana, Massachusetts, Michigan, New Mexico, North Carolina, Virginia, and Washington.

Most states fall somewhere in the middle, while six states meet four or fewer of the measures: Arkansas, Nebraska, South Dakota, Missouri, Oklahoma, and Wyoming.

A number of insurance companies running Medicaid programs for states have said they’re aiming to reduce terminations and enroll people in new plans.

During the last quarter, Elevance Health lost 130,000 Medicaid customers due to eligibility redeterminations, but they expect many to reenroll soon, according to its Chief Financial Officer John Gallina.

Molina Healthcare also lost about 93,000 Medicaid customers in the same period, mostly due to eligibility redeterminations.

Molina officials were cited as saying that Molina is helping those no longer eligible for Medicaid switch to individual insurance plans available through state-based marketplaces.

The Associated Press contributed to this report.