By Jaymie Baxley
North Carolina began kicking Medicaid participants off the rolls last month for the first time in more than three years, initiating a purge that experts fear will leave an untold number of residents without health insurance — even if they remain eligible for the program.
People enrolled in Medicaid had been protected by a federal provision that prevented states from discontinuing coverage during the COVID-19 pandemic. That meant that anyone who was deemed eligible for the combined state- and federally funded program starting in March 2020 remained on the program, ballooning North Carolina’s overall enrollment.
The provision expired after the end of the national public health emergency in March, restoring states’ ability to terminate benefits for adults who no longer meet the income requirements for Medicaid as well children who have aged out of eligibility.
Each state has its own plan for verifying whether participants continue to qualify for Medicaid, a process that’s been dubbed “unwinding.” In North Carolina, the eligibility of more than 2.5 million affected enrollees is being reviewed over the course of a year in monthly batches based on people’s renewal date, which in most cases means one year after their last renewal or their original approval for Medicaid.
Data released Monday by the N.C. Department of Health and Human Services showed that about 35,099 people lost coverage in June, a number about twice as high as initially predicted by the department. Only 14 percent of those terminations were linked to residents who were actually determined to be ineligible for Medicaid. The vast majority — more than 30,000 — had their benefits dropped for “procedural reasons,” according to DHHS.
“A beneficiary will be determined ineligible for procedural reasons if their caseworker needs information from them to complete their recertification but is unable to reach them or information requested has not been provided,” the agency wrote in a note accompanying the data. “NC Medicaid and the local DSS is contacting beneficiaries through multiple modalities (phone, text, email, forwarding address) if information is needed from beneficiaries at recertification.”
If a person fails to provide the requested information, DHHS wrote, their coverage “will be ended for procedural reasons on the last day of their certification period.” This means people who continue to qualify for Medicaid could lose — and may have already lost — coverage simply because the state does not have their current contact information.
‘Worse than predicted’
Over the past few months, health care advocates have voiced concerns that the state’s approach to the so-called unwinding of the continuous coverage requirement would lead to a wave of unwarranted terminations.
Doug Sea, senior attorney and program manager at the Charlotte Center for Legal Advocacy, said the newly released data is “worse than predicted.”
“The fact that so many people were terminated without first being determined ineligible is a grave concern,” he said, adding that the numbers released Monday appear to be a harbinger of things to come. “This is really the first full month of the unwinding and at this rate, we’re talking about 600,000 people, at least, being terminated.”
His estimate is twice as high as the loss originally predicted by DHHS. In May, the agency told NC Health News that 300,000 participants were at risk of losing coverage.
Sea said the Charlotte Center for Legal Advocacy received a report on Monday showing an even larger number of procedural terminations than what was reflected in the data released to the public by DHHS. He said the report, the contents of which were not shared with NC Health News, was provided by the state as part of a settlement and is confidential.
Before the pandemic, the Charlotte Center for Legal Advocacy was part of a class action lawsuit that sought to prevent North Carolina from illegally terminating residents’ coverage. A settlement reached this past October requires the state to send out notices informing Medicaid recipients of their rights during the unwinding.
Among other rights, individuals who believe their coverage was wrongfully terminated have up to 60 days to appeal the decision. If a person remains eligible for Medicaid, but their coverage was terminated because they failed to respond to a request for information or never received the request, their benefits should be reinstated if they provide the information to their local or county DSS office within 90 days.
But the seemingly simple task of contacting a caseworker has become increasingly difficult, according to Sea. Most of the state’s DSS offices, he said, are “pretty short-staffed” and “overwhelmed.”
“Reaching them by phone is no picnic if you have a disability and you need help,” he said. “It’s not easy getting through or finding out even who is working on your case, especially in the bigger counties.”
‘I’ll get to it next week’
Trisha Brooks, a research professor at the Georgetown University McCourt School of Public Policy and national expert on Medicaid, said North Carolina is “up there with states that have very high shares of procedural [terminations] as a percentage of total disenrollments” based on the public data published by DHHS.
An analysis by KFF, formerly known as the Kaiser Family Foundation, found that North Carolina currently has the fifth highest share of terminations attributed to procedural issues among the 27 states that have released their unwinding data. The only states with larger percentages of terminated enrollees who “did not complete the enrollment process and may or may not still be eligible for Medicaid” are Connecticut, South Carolina, Georgia and New Mexico, according to KFF.
Before the pandemic, Medicaid participants typically underwent annual or semiannual reviews to verify that they continued to qualify for coverage. But people who were added to the rolls while the federal mandate was in place have never gone through that process. Statewide enrollment grew 36 percent during the pandemic, with more than 797,000 people newly qualifying for coverage from March 2020 until April of this year.
The renewal period is, historically, the “most vulnerable time for people to fall out of coverage,” according to Brooks. She said this is especially true for participants who do not have urgent health care needs.
“If you’re healthy, it’s not urgent and you might be pushing that paperwork aside, saying, ‘I’ll get to it next week, I’ll get to it next week,’” Brooks said. “If you’re sick or you’ve got a child that’s got a chronic health condition, you’re paying attention and you’re gonna get it done.
“So far, what we’re seeing is the relatively healthy are more likely, not carte blanche, but more likely to be the ones losing coverage for procedural reasons.”
Brooks said many low-income families have multiple stresses in their lives that prevent them from keeping up with paperwork.
“They’re worried about how they’re going to put food on the table tonight and how they’re going to buy their kids school supplies for back-to-school,” she said. “And they’re thinking, ‘OK, because I’m healthy and up to date on my shots, I can let that go and when I need to go to the doctor, I’ll get back on.’ I don’t think we’ve figured out how to crack that nut on communications to increase the urgency of responding.”
Brooks also noted that people had been told during the pandemic that they wouldn’t be cut off of Medicaid, so they may have stopped paying attention to mailings from DHHS.
“There are people who say, ‘I got a termination notice, but I never got a renewal notice in the mail,’” she said. “Or they got the notice they tried calling the call center or the county and there’s a two-hour wait.”
Many moving parts at once
North Carolina’s official unwinding plan calls for a so-called “ex parte” approach, meaning most eligibility reviews are being conducted automatically “without any contact with the beneficiary” using information collected from wage databases and other sources.
Kody Kinsley, secretary for DHHS, told reporters in western North Carolina Tuesday that the state has “made serious investments in improving the technology systems” used by his agency, which has helped the state’s minimal-contact unwinding strategy run smoothly.
Indeed, the number of reviews that resulted in continued Medicaid coverage last month far exceeded the number of reported terminations. Nearly 137,900 residents were determined to still be eligible for benefits in June. Over 136,800 of those cases, or about 99 percent, were reviewed ex parte, requiring no action or response from the individual.
Still, Kinsley acknowledged that the state’s technology is not all-seeing. In some cases, a DSS worker may need an enrollee to provide personal information that is not readily available from a database.
“We do need to be able to reach people as part of that eligibility process, and if there are discrepancies in their income we reach out to them,” he told reporters at an event in western North Carolina. “And if in two months time we don’t hear back from them or they don’t answer certain questions, then by rules set out by the federal government we do have to terminate their coverage.”
Kinsley, however, downplayed concerns about the state’s disproportionate number of procedural disenrollments. He noted that fewer than 3 percent of mail sent by DHHS is “returned because of inaccurate addresses.”
“That’s very good compared to many other Medicaid programs,” he said. “We’re doing a lot of investigations into understanding if some of the folks didn’t respond because they know they’re not eligible, [and if] some of the people didn’t respond because of other causes.”
He added: “Our goal is simple. We want folks who are eligible for Medicaid to be on Medicaid and for folks that aren’t eligible to ideally find their health coverage from another place.”
For some displaced beneficiaries, that may mean going through the federal health insurance marketplace. People ordinarily have only 60 days to enroll in a marketplace plan after losing Medicaid, but CMS has created a special enrollment period for individuals affected by the unwinding. They can apply for marketplace coverage at any time through June 31, 2024.
Still, the timing of the unwinding presents a unique challenge for North Carolina, which is poised to become the 40th state to expand access to Medicaid to many low-income working families.
Medicaid expansion was signed into law by Gov. Roy Cooper just days before the continuous coverage mandate expired. It is expected to benefit hundreds of thousands of North Carolinians with incomes that are less than 138 percent of the federal poverty level for their family size — $34,306 for a family of three — up from the state’s previous limit of 100 percent.
DHHS has confirmed that many residents who lose coverage during the unwinding will likely become eligible again once expansion officially goes into effect. That won’t happen until a state budget is approved, which lawmakers had promised would happen promptly at the beginning of the state’s fiscal year at the beginning of July.
Instead, budget negotiations between the Republicans in the state Senate and the state House of Representatives have stalled, and a final budget could still be months away.
“Of everybody who was terminated for Medicaid coverage in this first month of redeterminations, 9,000 of them would’ve been able to stay on had we expanded Medicaid already,” Kinsley said. “So let’s get those 9,000 people back on […] and let’s get expansion in place — so that way our counties don’t have to do twice the work.
“They don’t have to redetermine people and take them off, and they don’t have to redetermine them and put them back on. That frees up their energies to focus on trying to reach other individuals to make sure that their eligibility is accurate.”\
Helen Chickering from Blue Ridge Public Radio contributed to this story by providing a recorded Q&A with state HHS Sec. Kody Kinsley.