Comment: Some states kicking eligible kids off Medicaid

By Lisa Jarvis / Bloomberg Opinion

In August, the U.S. passed a shameful milestone: The number of children kicked off Medicaid passed 1 million. And that's only the ones we can count; the real figure is likely much higher. The costs to these kids in the short term, and to U.S. society in the long term, will be steep.

The unwinding of pandemic-era rules that allowed continuous Medicaid coverage means millions of Americans are being dropped from the rolls. According to data from KFF, kids account for 43 percent of those losing public health insurance.

That's despite most of those children still being eligible. So what's happened? Many seemed to have been dropped because of a technicality or clear mistake: A caregiver missed a deadline to turn in paperwork (an arcane and often confusing process to maintain Medicaid access), the paperwork went to the wrong address or it arrived after the deadline to respond had passed.

It's hard not to conclude that states are making a depressing calculus: The money saved by dropping as many people as possible from Medicaid — including vulnerable children — outweighs the benefits of providing coverage.

In some states, the widespread disenrollment of children seems to be happening not by accident but by design. In Texas, for example, KFF data show that kids account for 81 percent of disenrollments. They represent at least half in Kansas, Idaho and Missouri. And those are just the states that are reporting disenrollments by age; the true size of the problem is not yet clear. Florida, for example, is said to have kicked off at least 120,000 children, and has made it difficult for families to get help reinstating access.

The Centers for Medicare and Medicaid Services believes an error in states' autorenewal is to blame. Many children qualify for Medicaid even when the adults in their household don't; that's because the income threshold for kids is much higher. Georgetown's Center for Children and Families thinks the problem is that when a state's systems flag one family member as potentially ineligible, they are sending renewal paperwork to the entire household rather than to just that individual. Then, if no reply is received, everyone — including kids who likely still qualify for coverage — is kicked off.

In a stern warning to states last week, CMS made clear that approach isn't legal. The agency instructed any states with the issue to immediately pause these disenrollments, reinstate coverage, and introduce plans to mitigate future errors. If they don't, they risk myriad penalties.

But that might not be enough. Consider newborn babies. Newborns, at least in theory, should be protected from the disenrollment trend because any birth covered by Medicaid confers benefits to the baby for up to a year. But when Janet Currie, co-director of Princeton University's Center for Health and Wellbeing, dug into the statistics from states that report by age, she noticed the numbers of infants covered by public insurance are going down, too.

One disturbing conclusion seems to be that even when there's a law to cocoon the most vulnerable, states are setting up barriers. Currie's work is ongoing, but she's noticed that some states seem to be making it deliberately challenging to complete the paperwork. In Texas, something as simple as skipping a question that doesn't seem to be applicable (rather than writing "NA") can result in coverage loss for a newborn.

The short-term consequences are clear: Children lose out on necessary health care. An analysis by KFF found that in 2021, nearly a third of uninsured children did not see a doctor in the past year, compared with just 8 percent of kids with public or private insurance.

There will be long-term downsides as well. A large and convincing body of evidence shows that kids covered by Medicaid have fewer chronic conditions later in life, and as young adults they are less likely to be hospitalized or visit the ER.

Access to insurance also affects their economic well-being. One study linked the expansion of Medicaid coverage in the 1980s and 1990s to a rise in high school graduation rates in the 2000s. Another found that childhood Medicaid access increases college enrollment.

"That all could be lost if these children fall through the cracks, get disenrolled, end up uninsured and are not found through outreach and brought back into the program," says Georgetown University professor Edwin Park. "If you're uninsured, you're going to see damage across health, education, and the long-term financial prospects for these kids into adulthood."

Meanwhile, letting kids drop off the rolls might still cost states in the long run. When an uninsured child goes to the emergency room, guess who often ends up covering the bill? That's right, Medicaid. As Currie points out, that means "we're going to pay for the expensive stuff anyway," while deciding the far cheaper preventive care — basics like childhood vaccines and well visits — is expendable.

It simply doesn't make sense.

The deadline imposed by CMS for states to fix these flawed disenrollments is quickly approaching. If they can't get their acts together, the agency shouldn't hesitate to use every tool at its disposal to force states to do better for kids.

Lisa Jarvis is a Bloomberg Opinion columnist covering biotech, health care and the pharmaceutical industry. Previously, she was executive editor of Chemical & Engineering News.