During the COVID-19 public health emergency, Congress prohibited states from disenrolling people from Medicaid. The idea is to prevent people from losing their insurance during the pandemic.
But the emergency is over. On April 1, state Medicaid programs regained the ability to drop people who were no longer eligible.
Some states have moved to reassess Medicaid enrollee eligibility. But other states are deliberately delaying orders from the Biden administration, costing taxpayers billions of dollars. These delays in the redetermination process are extremely irresponsible. According to the law, people who are eligible for Medicaid should stay in the program and those who are not eligible should not.
The Families First Coronavirus Response Act of 2020 provided states with additional federal funding for their Medicaid programs, but only if they agreed not to exclude anyone off your Medicaid list for the duration of the public health emergency.
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By March of this year, the number of people enrolled in Medicaid and the state Children’s Health Insurance Program had increased to 93 million. That’s about one-third of Americans under the age of 65. That number far exceeds the scope of a program originally designed as a safety net for pregnant women, the blind and low-income seniors unable to support themselves.
Unfortunately, Congress has allowed states maximum flexibility to determine eligibility at their own pace. States have until the end of May 2024 to complete the process, and enhanced federal payments to Medicaid will gradually decrease until returning to pre-pandemic standards later this year. Preliminary figures from the federal Centers for Medicare & Medicaid Services indicate that about one-third of redeterminations result in disenrollment.
This slow process is costing taxpayers billions of dollars. According to a new study by the Paragon Institute, states could save themselves nearly $12 billion next year if they start redeterminations in April and complete them within six months instead of starting in July and taking 12 months. If all states follow this faster timeline, total savings for state and federal taxpayers could exceed $40 billion.
Deep blue states like California and New York, which are heeding the administration’s call to slowly audit their Medicaid rolls, will spend an additional $1.3 billion and $900 million, respectively, to coverage for ineligible people who are still enrolled in Medicaid. according to Paragons estimates.
Other states are moving quickly. For example, Arkansas began auditing its Medicaid records in April and will likely complete its work soon. If it were completed within six months, instead of 12, it would save state taxpayers $122 million, according to Paragons’ research.
In some cases, the state may determine eligibility through its own resources, such as by automated income testing and other verification methods.
In other cases, beneficiaries may receive notice by mail, email, phone, or text message that they must provide documentation to maintain their Medicaid coverage. Some may have ignored such requests during the pandemic but could face deregistration if they continue to do so now.
Federal officials are opposing disenrollment under this procedure, under which people would lose Medicaid coverage for failing to verify eligibility. Since April, the Centers for Medicare & Medicaid Services has paused redetermination procedures in dozens of states due to alleged non-compliance with federal standards.
The suspension is costing taxpayers millions of dollars more every day. And that’s unjustified, because concerns about truly qualified enrollees losing coverage due to paperwork risks are overblown. The Florida Department of Children and Families found that more than half of the unresponsive enrollees the state tried to contact up to 13 times had not used Medicaid in the past year or received other insurance.
If people eligible for Medicaid lose coverage due to a bureaucratic error, they can easily re-enroll the next time they need health care. And Medicaid coverage is retroactive, it can cover health care costs for three months before re-enrollment.
It is wasteful to continue providing expensive government benefits to people who, by law, do not qualify. State leaders should quickly examine their Medicaid programs to ensure taxpayers are not on the hook for such waste.
Sally C. Pipes is president, CEO and health care policy fellow at the Pacific Research Institute.
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