Why are so many people losing Medicaid?

Why are so many people losing Medicaid?

By Jaymie Baxley

Nearly 68,400 people in North Carolina have lost Medicaid since the state resumed terminations in June, with the vast majority being kicked off the rolls for what are essentially paperwork issues.

The purge follows the expiration of the continuous coverage requirement, a federal provision that prevented states from disenrolling Medicaid participants — old and newly qualified recipients — for the first three years of the COVID-19 pandemic. The mandate, which ended in April, allowed beneficiaries to bypass the annual — and sometimes semiannual — renewal process for Medicaid. During the federal COVID public health emergency, people enrolled in the program were automatically re-enrolled, even if they no longer qualified.

North Carolina is now faced with the unprecedented challenge of verifying the ongoing eligibility of more than 2.5 million enrollees in monthly clusters over the course of a year. This undertaking, known as the “unwinding” of the continuous coverage requirement, could leave as many as 300,000 residents without health insurance, according to the N.C. Department of Health and Human Services.

In theory, the people at greatest risk of losing coverage should be those who became ineligible for Medicaid while the federal mandate was in place. That would include participants with incomes that exceed the currently allowed limit for the government-funded program and young adults who have aged out of their childhood benefits. 

But the latest available data show that 87 percent of the state’s unwinding-related disenrollments involve people who may still qualify for Medicaid. An untold number of these residents were dropped from the rolls simply because a caseworker did not have all the information and paperwork needed to complete their renewal. 

Disproportionate disenrollments 

From June to July, DHHS recorded 8,637 cases in which North Carolinians lost Medicaid after they were determined to no longer meet the eligibility requirements. During the same two-month period, a whopping 59,762 residents had their coverage terminated 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 within 30 days, their benefits are automatically discontinued. 

DHHS says the state has “made many efforts to reach beneficiaries to get their information” during the unwinding, including through multiple letters, emails, text messages and automated phone calls. But if the beneficiary’s caseworker is using an outdated address or phone number, they may never receive the message.

There are other reasons a person might fail to respond. If they receive a notice asking them to provide information but it is not written in their preferred language, they may have difficulty understanding the request. If they understand the notice but are skeptical about the state’s sudden need for information that has not been required for years, they may dismiss the request as a potential scam.

“We know that a large share of people who are procedurally disenrolled actually remain eligible,” Trisha Brooks, a research professor at the Georgetown University McCourt School of Public Policy and national expert on Medicaid, said in a recent interview with NC Health News. “The higher the number of procedural disenrollments, the more concern we have that people are losing coverage inappropriately.”

That concern is shared by the federal Centers for Medicare & Medicaid Services, which on Aug. 9 sent a letter to North Carolina and other states warning that “a high rate of procedural terminations may indicate that beneficiaries may not be receiving notices, are unable to understand them, or are unable to submit their renewal through the required modalities.” 

North Carolina is tied with Connecticut for the seventh highest percentage of procedural disenrollments reported since the start of the unwinding, according to an analysis by KFF. The state with the highest share is New Mexico, where 97 percent of terminations have been linked to procedural issues.

Residents who remain eligible for Medicaid but were disenrolled for procedural reasons aren’t entirely out of luck. They have 90 days from their notice of termination to provide their local or county DSS office with any missing information, at which point their benefits could be reinstated

In an email to NC Health News, Hannah Jones, press assistant for DHHS, wrote that regional managed care organizations, primary care coordinators and other “health plan partners” will attempt “another round of outreach to encourage beneficiaries to provide the requested information” after they have been procedurally disenrolled. 

Expansion in limbo

The issues created by the unwinding are compounded by uncertainty surrounding the state’s Medicaid program. 

Just days before the continuous coverage requirement expired, North Carolina became the 40th state to pass legislation expanding access to Medicaid. The measure will loosen some of the state’s long-standing eligibility requirements and provide coverage to an estimated 600,000 low-income residents. Many of these people are childless adults without disabilities, a population that is effectively ineligible for coverage under the current criteria.

But implementation of the law has been held up amid stalled negotiations among Republicans in the General Assembly over a state budget, which must be enacted before expansion can officially take effect. Kody Kinsley, head of DHHS, has said that thousands of residents who were deemed ineligible for Medicaid during the first months of the unwinding would have remained insured if not for the delay.

Still, the unwinding must go on. In an interview last month with NC Health News, Kinsley said DHHS has already “stretched the unwinding period to the maximum amount” allowed by the federal Centers for Medicare & Medicaid Services. 

“There isn’t a necessary ability to slow down,” he said. “We are constantly looking at ways that we can try to hold people on to get them where they’re eligible. But once you start the redetermination process, we can’t stop that.”

The department has instead put forth a plan to “de-couple” expansion from the budget if the political stalemate has not been resolved by Sept. 1. While this would allow DHHS to expedite the launch of expansion, the agency still needs approval from state lawmakers to move forward.

DHHS announced the plan in a news release on July 26, but it has yet to come to a vote in the state Senate or House of Representatives. Senate leader Phil Berger and House Speaker Tim Moore, both Republicans, did not respond to emails seeking comment on the department’s proposal, but both have been cool to the idea in recent conversations with reporters.

‘Gambling with my life’

Frustrated with the lack of progress, a group of advocates gathered in Raleigh on Aug. 16 to urge lawmakers to take action. They held a news conference that included the reading of a letter written by Anthony Brooks, a 57-year-old Medicaid participant from Beaufort County.

Brooks, who is in need of a surgically implanted defibrillator after being diagnosed last year with heart failure, was recently deemed ineligible for coverage. The money he receives from his disability benefits is $7 more than the amount allowed under the state’s current income limit.

“Now I am rushing to schedule a surgery to get a defibrillator in my heart before I lose coverage at the end of the month,” he wrote. “If Medicaid expansion had already gone live, I would still be eligible to continue my coverage, and I wouldn’t be stressing and scrambling.”

It has been “infuriating,” he added, to see expansion delayed while lawmakers debate issues like casino legalization. 

“They are quite literally gambling with my life,” Brooks wrote. “With my complicated medical issues, the fact that I am looking at losing my health insurance could very literally be a death sentence for me.”

His frustration was echoed by Gov. Roy Cooper, who repeatedly criticized Republican legislators for delaying expansion during a series of roundtable discussions with health officials in rural counties earlier this month. Cooper’s three-stop tour began on Aug. 15 in Martin County, where a financially struggling hospital, Martin General, was recently forced to close.

“The residents of Martin County have seen firsthand the devastating consequences of the failure to expand Medicaid in North Carolina and we need to do everything we can to help with the immediate consequences of the hospital closure,” Cooper, a Democrat, said in a news release following his visit. “Republican leaders need to do their jobs, pass a budget and start Medicaid Expansion now to support our state’s rural communities, keep hospital doors open and draw federal money to fight the opioid crisis.”

Both Cooper and Kinsley estimate that about 18,000 expansion-eligible North Carolinians have lost Medicaid since the start of the unwinding. They predict another 9,000 will be kicked off the rolls by the end of this month. 

DHHS has said that expansion could be delayed until at least December if the impasse on the state budget continues past Sept. 1, which is next Friday. Legislative sessions are scheduled for Monday, Aug. 28, but lawmakers have indicated that the earliest they’ll have a budget vote is the week of Sept. 11.

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