States begin dis enrolling ineligible Medicaid patients after 23 million were automatically added to Medicaid rolls during Covid as CMS pushes back

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 Corona virus 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 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 (ACA), 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.

Now, with the public health emergency ended on May 11 and under Section 5131 of Subtitle D of the $1.7 trillion omnibus, as of 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.

States like Idaho and Missouri are already well underway with beginning the disenrollments. Idaho has identified as many 153,000 patients who are likely to be disenrolled because the state says they are no longer eligible, of which more than 100,000 have already been disenrolled.

According to the Idaho Capital Sun: "So far, Idaho has removed 103,000 people from Medicaid out of a group of 153,000 the state flagged as likely to be removed from Medicaid, Shane Leach, administrator of the Division of Welfare in the Department of Health and Welfare, told the agency's board Thursday. More than half of those people - 62% - were removed for procedural reasons, or because they didn't reply to the state's requests for eligibility information. Another 42,000 were removed because they were determined to be ineligible for Medicaid, Leach said." One thing that separates Idaho from other states is that its Medicaid expansion was implemented in 2020 after passing via ballot initiative in 2018, coinciding with the Covid pandemic. As a result, everyone who would have normally qualified for Medicaid expansion were brought into the program - at the time of the ballot initiative passage in 2018 the Idaho Statesman reported "an estimated 50,000 to 60,000 of the working poor" who would qualify - plus everyone who had lost their jobs during the pandemic between March 2020 and May 2021 (more than 350,000 based on weekly initial jobless claims in the state) and then sought medical assistance and were automatically enrolled in Medicaid when they did not possess insurance.

According to Kaiser, pre-ACA Medicaid enrollment in Idaho in Dec. 2019 was about 267,000 and as of April 2023 was almost 441,000 as more than 170,000 were added to the rolls.

Therefore, losing 100,000 out of 170,000 when Medicaid expansion in Idaho was supposed to benefit about 50,000 or so sounds about right.

But already CMS is pushing back against Idaho, Missouri and about 14 other states in a bid to keep as many people enrolled. CMS cites the law governing the disenrollments from the omnibus spending bill, which prohibits "disenrollment 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.

Which is what Idaho and Missouri say they are doing, including sending mail queries and following up with phone and text messages.

But CMS disagrees. In its letter sent to Missouri in May (a similar letter was sent to Idaho) it stated states must "continue to provide Medicaid to eligible individuals until they are found to be ineligible.

States should ensure all steps are taken to complete a renewal on an ex parte basis and if not possible, to send renewal forms to all beneficiaries before terminating coverage for procedural reasons. If there are delays in processing high volumes of renewals, states must monitor that eligibility systems do not terminate coverage on these cases until reviews are complete." CMS added that just because beneficiaries do not respond to renewals does not mean they should necessarily be removed, even if the law requires it, "While CMS expects procedural terminations, 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." This is why CMS is so focused on performing the renewals on an ex parte basis without the patient's involvement by verifying food stamp eligibility, income and other mechanisms for determining continued Medicaid eligibility under waivers to states offered under federal law, as reported by Kaiser Family Foundation reported on April 5, "with the goal of with the goal of minimizing procedural terminations." According to Kaiser, "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 of 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." But if Congress had wished to make the ex parte renewals mandatory, it would have done so with its law. It made it optional for states.

What CMS appears to be doing with the states it is accusing of non-compliance, including Idaho and Missouri, is attempting to impose these waivers onto the states - all to keep as many people enrolled as possible by making it more difficult to perform disenrollments for procedural reasons.

But it is not that critical, especially if patients who had changed address and later show up for medical assistance can just be re-enrolled just like they were during Covid, provided they still qualify. An unintended consequence of Managed Care Organizations dedicating too many resources to attempting to track down patients without contact information is that those who do qualify and can be reached will end up waiting much longer to be renewed and could fall through the cracks.

There's no reason to keep people enrolled for which there is no point of contact and no verifiable income eligibility information - beneficiaries could have died or moved out of state - but for some reason CMS appears committed to this approach. Time will tell when patients return to the doctor or hospital without insurance how many of those beneficiaries will be recovered into the now dramatically expanded post-Covid public health system.

Robert Romano is the Vice President of Public Policy at Americans for Limited Government Foundation.