Exclusive: Biden administration warns states to minimize coverage loss as they restart Medicaid eligibility reviews

By Tami Luhby, CNN

The Biden administration wants to make sure states are doing all they can to minimize the number of Medicaid enrollees who wind up uninsured once states regain the ability to drop ineligible recipients next month.

The Department of Health and Human Services this week sent governors a letter warning them to adopt measures to curtail coverage losses, which could affect millions of people.

“I urge you to ensure that your state is implementing every possible option to prevent eligible individuals from losing coverage,” HHS Secretary Xavier Becerra wrote in bold in the letter, shared exclusively with CNN.

States risk losing augmented federal Medicaid funding for the rest of this year if they don’t comply with various requirements in their eligibility reviews, Becerra wrote. They must attempt to ensure that they have up-to-date contact information for enrollees and reach out to recipients via multiple methods before dropping coverage based on returned mail. Also, states have to report monthly renewals and terminations, among other metrics.

Keeping people enrolled

States have not been able to terminate residents’ Medicaid coverage since the start of the pandemic in exchange for receiving additional federal matching funds. This continuous coverage requirement, which Congress passed as part of a Covid-19 relief package in March 2020, has led Medicaid and Children’s Health Insurance Program enrollment to balloon to more than 91 million people.

All that changes on April 1, when states can once again start disenrolling Medicaid recipients thanks to the federal spending package that Congress passed in December. The enhanced federal match will phase out over the course of the year, relieving states of some of the pressure to winnow their Medicaid rolls quickly.

States have until the end of May 2024 to redetermine enrollees’ eligibility.

A total of roughly 15 million people could be dropped from Medicaid when the continuous coverage requirement ends, according to an analysis HHS released in August. About 8.2 million folks would no longer qualify, but 6.8 million people would be terminated even though they are still eligible. That can happen for procedural reasons, including failing to respond to requests and provide the necessary information to state agencies.

As many as 6.7 million children are at risk of losing coverage, even though the vast majority of them will remain eligible, according to the Georgetown Center for Children and Families.

Many of those who no longer meet the requirements for Medicaid could shift to highly subsidized Affordable Care Act plans or other coverage, such as job-based policies. To smooth the transition, HHS created a special enrollment period that allows affected Americans in states using the federal exchange to sign up for policies through July 31, 2024.

Just how many people dropped from Medicaid will wind up uninsured is not known. Much of it will depend on how the states handle the eligibility reviews.

State agencies, however, face multiple hurdles in unwinding the continuous coverage provision. Many are short-staffed and have to work with antiquated technology. Plus, they may not have accurate contact information for their enrollees, which has always been a challenge but could be even more so now since more people may have changed addresses during the pandemic.

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