By Jaymie Baxley
In June 2023, the N.C. Department of Health and Human Services began verifying the eligibility of 2.5 million Medicaid participants for the first time since the beginning of the COVID-19 pandemic.
This marked the start of the so-called unwinding of the continuous coverage requirement, a federal provision that provided states with increased funding for Medicaid in exchange for not removing beneficiaries from the rolls while the national emergency declaration for COVID-19 was in place.
Under the provision, people enrolled in the government-funded insurance program were automatically re-enrolled, even if changes in their income or household size meant they no longer qualified for coverage. In North Carolina, Medicaid beneficiaries need to recertify their eligibility for the program at least once a year to keep receiving benefits. In light of the extraordinary health care emergency, Congress waived this requirement.
After the emergency declaration expired in April 2023, states were allowed to resume regular eligibility checks. This was a massive undertaking in North Carolina, where more than 740,000 residents, many of whom had never been subject to the traditional recertification process, became eligible for Medicaid during the pandemic.
There were more complications. Legislation making North Carolina the 40th state to expand access to Medicaid passed before the continuous coverage requirement ended, but the measure did not take effect until December — halfway through the state’s original 12-month timeline for initiating eligibility reviews.
Despite the challenges, North Carolina has had relatively few unwinding problems, compared with other states. More than 2.3 million reviews had been completed as of last month, according to DHHS, and the vast majority of participants remained enrolled in Medicaid.
Now, the unwinding is winding down.
“We are in what the federal government characterizes as the period of ‘normal operations,’” said Emma Sandoe, deputy director of Medicaid policy for DHHS.
She added that there are still some renewals that have been initiated but not completed. “I don’t want to say that it’s forever finished until we have everyone go through the process.”
Unwinding outlier
North Carolina has the nation’s lowest rate of Medicaid disenrollments in connection with the unwinding, according to an analysis by KFF.
Only 12 percent of redeterminations completed by the state have resulted in participants losing coverage, well below the national average of about 32 percent. In some states, more than half of redeterminations have ended in terminations because of missing paperwork — an issue that has not been as widespread in North Carolina.
The state’s disenrollment rate was higher during the early months of the unwinding. From June to November of last year, terminations accounted for nearly 19 percent of North Carolina’s unwinding outcomes.
Expansion slowed the purge. The long-awaited measure raised the state’s income limit for Medicaid, extending eligibility to people who make up to 138 percent of the federal poverty level based on their household size, which comes to about $35,600 a year for a family of three. The previous threshold for coverage before expansion had been 100 percent, or about $25,820 a year in income.
When expansion took effect on Dec. 1, many existing beneficiaries who would not have previously passed the redetermination process became eligible for renewal. At the same time, hundreds of thousands of newly eligible North Carolinians were able to sign up for coverage.
“The exact timing of when Medicaid expansion would start was a moving date for most of the unwinding period,” Sandoe said during a recent presentation about the unwinding. “Implementing that, which is very eligibility-focused, on top of all of the unwinding activities certainly took a toll on our staff as well as our IT systems, but we were able to prepare for that and successfully launch.”
Nearly 500,000 people have enrolled in Medicaid since expansion went live. The fast pace of enrollment has surpassed projections by DHHS, which initially expected the measure to add 600,000 beneficiaries over a span of two years.
Because of the expansion, North Carolina is the only state where Medicaid enrollment increased during the unwinding. Every other state saw declines in enrollment, according to an analysis by Georgetown University’s Center for Children and Families.
No contact
The state’s unwinding data stands out for other reasons.
North Carolina implemented an “ex parte” process for redeterminations, using information from places such as wage databases run by the Social Security Administration, the Internal Revenue Service and other agencies, to confirm that participants continued to meet all the requirements for Medicaid. If a person’s information checked out, their coverage was automatically renewed with no action needed on their end.
Ninety-nine percent of North Carolina’s renewals were completed this way, the largest share of any state. The small number of remaining renewals were processed using paper forms filled out by beneficiaries.
“We’re very happy with the level of automation that we’ve been able to introduce over the last several years to help support this process and get folks where we can quickly renew them,” said Julia Lerche, chief strategy officer for DHHS.
The ex parte system isn’t perfect. Of the more than 281,400 terminations recorded in North Carolina since the start of the unwinding, only about 39,000 involved people who were no longer eligible for Medicaid. The majority of disenrollments involved residents who may have continued to qualify for the program but lost coverage for “procedural reasons.”
Procedural disenrollments typically occur when a local or county office of the Department of Social Services is unable to independently verify a Medicaid participant’s income or household size. If the person fails to respond to a request for the missing information — whether deliberately because they’ve moved into a job with benefits or inadvertently because perhaps they’ve moved and their mail was not forwarded — their benefits are terminated.
Although procedural disenrollments make up a large percentage of unwinding-related terminations in North Carolina, they represent just 10 percent of its outcomes overall. The state has the nation’s second smallest rate of procedural disenrollments in proportion to its total redeterminations, according to KFF.
The state with the smallest rate is Maine, where procedural disenrollments account for 3 percent of all outcomes. Utah has the largest share with 52 percent.
“There’s a lot more work involved in a termination than in a positive renewal of someone,” Lerche said. “It’s the ones that don’t go through the automated processes that the counties are in different places for getting through the full redetermination process. There’s noticing requirements and requests for additional information that have to go out if there isn’t readily available data to confirm their eligibility.”
The Centers for Medicare and Medicaid Services recently gave North Carolina permission to extend its unwinding-related renewals through November. In the meantime, DHHS is urging participants to respond if they receive a request for information from their local DSS office.
“We definitely want to make sure that people are checking their mail and processing those redeterminations if they haven’t gone through that process within the last year,” Sandoe said.
