How many of the 23.3 million added to Medicaid during Covid will become permanent?

As many as 23.3 million Americans were added to the Medicaid rolls

since Feb. 2020 during the program’s continuous enrollment program passed by veto-proof margins in 2020 in the Families First Coronavirus Response Act—whereby nobody was reevaluated on the basis of income during and after the Covid pandemic—reaching a record 95 million in March 2023, according to the latest data from the Centers for Medicare and Medicaid Services (CMS).

The massive expansion of socialized medicine came as 25 million jobs were temporarily lost and unemployment claims soared. The mechanism for the expansion appears to have been automatic enrollment when patients showed up to the hospital and other medical services without insurance during the pandemic.

The largest increases were in 2.8 million in California, 1.6 million in New York, 1.6 million in Texas and 1.4 million in Florida.

Also, 7.2 million of the 23.3 million were children under the age of 19, 8.8 million were eligible because of the Medicaid expansion under the Affordable Care Act, 1.25 million were disabled or elderly and 5.76 million were other adults, according to an estimate compiled by Kaiser Family Foundation.

As a result, Medicaid spending grew from $409 billion in 2019—following declining enrollment numbers beginning in 2017—to a peak of $607 billion 2023. In 2024, with the disenrollments, Medicaid spending will drop by about $52 billion to $558 billion, which seems to agree with the government’s estimates of the expected drop off in enrollment. About 75 percent of the spending increase will remain in place.

It was Medicaid expansion larger than that even achieved under Obamacare during the entire period of expanded enrollment from 2010 through all of 2019, when the number went from 56 million before the Affordable Care Act was passed, to 71 million in 2019. It had reached 75 million in 2016, but continued decreases of the unemployment rate during the Trump years drove down the means-tested eligibility of the program before the steep Covid recession.

Now, with the public health emergency ending on May 11 and under Section 5131 of Subtitle D of the $1.7 trillion omnibus, after March 31 of this year, states are finally allowed to resume verifying income of recipients resulting in redeterminations of eligibility as increased federal spending for Medicaid is phased out.

CMS has estimated that as many as 15 million patients could be disenrolled but in its latest guidance worries that “Without updated contact information, notices, renewal packets, and/or requests for additional information may not reach individuals who have moved, leading to inappropriate coverage loss among individuals still eligible for coverage.”

And so, Congress created a way to keep millions of patients continually enrolled in Medicaid for as long as possible even if Managed Care Organizations (MCOs) are unable to get in touch with them.

The Department of Health and Human Services (HHS) estimated in Aug. 2022 that as many as 6.8 million of the estimated 15 million to be disenrolled “will lose Medicaid coverage despite still being eligible (‘administrative churning’), although HHS is taking steps to reduce this outcome.”

The implication is that of the 23.3 million, as many as 16.5 million will end up becoming permanent Medicaid enrollees as “HHS is taking steps to reduce this outcome”. If nothing else, if the 6.8 million still technically qualify, they’ll simply be reenrolled the next time they go to the doctor without insurance.

To help that along “to reduce this outcome,” Kaiser Family Foundation reported on April 5, “CMS announced the availability of temporary waivers through Section 1902(e)(14)(A) of the Social Security Act. These waivers will be available on a time-limited basis and will enable states to facilitate the renewal process for certain enrollees with the goal minimizing procedural terminations. As of February 24, 2023, CMS had approved a total of 163 waivers for 43 states (Figure 6). These waivers include strategies allowing states to: renew enrollee coverage based on SNAP and/or TANF eligibility; allow for ex parte renewals of individuals with zero income verified within the past 12 months; allow for renewals of individuals whose assets cannot be verified through the asset verification system (AVS); partner with managed care organizations (MCOs), enrollment brokers, or use the National Change of Address (NCOA) database or US postal service (USPS) returned mail to update enrollee contact information; extend automatic enrollment in MCO plans up to 120 days; and extend the timeframe for fair hearing requests.”

The law requires prohibits “disenroll[ment] from the State plan or waiver any individual who is determined ineligible for medical assistance under the State plan or waiver pursuant to such a redetermination on the basis of returned mail unless the State first undertakes a good faith effort to contact the individual using more than one modality.”

That is at least two attempted points of contact, say, by mail and by phone, but states could use more than two if they choose. The law provides no upper limit on how many modalities may be used. This is a condition of continuing to receive the increased federal funding for the Covid Medicaid expansion, which will phase out completely on December 31.

Now, with the additional measures being taken by the federal government, it remains to be seen how many of the 23.3 million added to Medicaid on a net basis will actually be disenrolled, especially if so many of them are said to still be eligible. The amount of fraud in the disenrollments alone could be gargantuan, as now there is a perverse incentive to conceal income, or rose, not to work in order to continue to qualify.

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