Options after lost health insurance

How would you feel if you suddenly lost your health insurance? Frightened? Vulnerable?

Well, 4 million Americans, including families with small children, have just faced that terrifying reality. All were on state Medicaid programs, many joining during the pandemic when they lost their jobs and their insurance coverage. Despite returning to work, they were allowed to stay on Medicaid without income review — until May.

Now the states are required to review their eligibility to continue. In the coming months, more people will face this reality. Many went back to work but continued to be on Medicaid instead of having a paycheck deduction for employer-provided insurance. They can ignore the renewal packets that come in the mail if they opt for employer-provided insurance.

But others work in low-paying jobs that don't offer health insurance. Or they have no income at all. They need to respond immediately when receiving the renewal request packet to verify their eligibility.

Many people aren't responding, perhaps because they already have other insurance or they are confused by the notification. Perhaps they have moved and never received the information.

Even worse, in the rush to reassess eligibility, many states have been overwhelmed by the review process. In fact, CMS, the federal agency that is responsible for health services, has just sent a letter to 36 states reprimanding them for long call-center wait times, complicated procedures and lack of follow-up.

According to a new report by the Kaiser Family Foundation, approximately three-fourths of the dis-enrollments since the process began in early spring were because the renewal packets were not returned. But among those who did return their renewal packets, two-thirds successfully renewed their coverage.

This doesn't seem to be a political issue. Both red states and blue states are accused in this bureaucratic nightmare.

Caught in the middle, though, are millions of Americans who are barely scraping by. If uninsured in a health care emergency, they will run to hospital emergency rooms, which are required to treat and stabilize health problems but not to provide further care. Some will receive bills for treatment, which will likely result in collections. And in rising health insurance premiums for all of us.

Medicaid solutions

If you know someone who is being taken off Medicaid, please let them know through local community groups that there is help available. Each state has a program for low-or no-income adults and children, setting its own income limits. There may also be separate programs for children only, with higher income cutoffs. Don't assume you won't qualify.

If you were already on Medicaid, the first step is to return the re-enrollment package you received in the mail, despite its seeming complexity. There is no time limit or open enrollment period for Medicaid, but you must act promptly to prevent dis-enrollment. And if you think you were mistakenly removed, you can immediately reapply.

'Obamacare' health insurance marketplace

One alternative for people who earn more than their state's income limit for Medicaid is Obamacare. It's a mistaken assumption that these Affordable Care Act plans are "too expensive." In fact, according to HealthInsurance.org, an online consumer resource site, there are actually free "Silver" plans with excellent coverage available to people with up to about $20,000 in annual income. And free or low-cost coverage for people with higher incomes in many areas. Income limits are much higher if families have children.

You can find your own plan and cost in every state using their calculator at www.healthinsurance.org/Obamacare/subsidy-calculator.

And if you go to the government website Healthcare.gov, you can search specific plans and apply online. If your state of residence is one of those maintaining its own health insurance marketplace, you'll be connected to your state marketplace website.

Health care is one of those confusing topics that make your eyes glaze over — especially at the moment you lose coverage from your job or through this new Medicaid review. Louise Norris, health policy analyst at HealthInsurance.org, says they are trying desperately to keep people from "falling through the cracks" during this unsettling period. She notes, "We all agree that people who are no longer eligible should be taken off Medicaid, but it's important to do that without dis-enrolling people who are still eligible."

States need to cut through the reapproval bottlenecks. And people who are uninsured need to understand these additional resources, which I hope you will share. That's the Savage Truth.

Terry Savage is a registered investment adviser and the author of four best-selling books, including "The Savage Truth on Money." Email her at terry@terrysavage.com.