Inside the Problems With Medicaid

The Number of Uninsured Americans Will Almost Certainly Rise

If you work in healthcare, here’s a statistic that should give you pause: more than 15 million low-income Americans could lose their Medicaid insurance in coming months—and about 7 million of them may still be eligible.

The reason is that governments at all levels are eliminating measures put in place during the pandemic, and it is not always going well. While it was tough to ramp up programs to ensure people were cared for amid the COVID-19 outbreak, it is proving equally tough to return those programs to normal.

The result is that the number of uninsured Americans, which reached an all-time low last year, is very likely to climb. That’s something every physician group should care about.

In the case of Medicaid, here’s what’s at play: during the pandemic, the federal government gave states additional funding in return for a guarantee that Medicaid recipients would not lose their coverage. States stopped conducting the annual re-enrollment process that usually takes place for each recipient.

It worked well, for a while. The population who used Medicaid and the Children's Health Insurance Program (CHIP), normally about 70 million, rose to more than 90 million nationwide. Early last year, America’s uninsured rate reached an all-time low of 8%, according to the U.S. Department of Health and Human Services.        

“The guaranteed coverage amounted to an extraordinary reprieve for patients, preserving insurance for millions of vulnerable Americans and sparing them the hassles of regular eligibility checks,” The New York Times wrote.

The Great ‘Unwinding’

Now, that reprieve is over. The Public Health Emergency that enabled the federal government to expand pandemic services has ended and states must again begin the process of verifying Medicaid eligibility every year. The industry calls it the “unwinding.”

With Medicaid rolls swollen after the pandemic, returning states to annual verification is no easy task. People move and change phone numbers. They swap jobs and their incomes vary. Even in the best of circumstances, many people find it difficult to handle the bureaucracy that comes with government insurance, especially those who are elderly, experiencing homelessness or living with disabilities. Doing so when states are impacted and experiencing delays may be even more difficult.

States are making a mighty effort, but the results can vary substantially. Some states are using sophisticated solutions, matching Medicaid rolls with data from other programs that can make the job easier or implementing text messaging systems that can help people navigate the system. But many states are still hampered by aging technology and out-of-date practices.

Medicaid ‘Churn’ and Other Problems

The result is that many people are likely to lose health insurance. In some cases, they may fall into a “gap,” unable to afford insurance on the exchanges created by the Affordable Care Act but making too much money to qualify for Medicaid. Others will fall prey to what the industry calls “churn,” going uninsured for a period and then re-enrolling in Medicaid later.

A Kaiser Family Foundation study found that, within a year after they left Medicaid, 65% had a period without insurance while only 35% maintained coverage. Among those who went uninsured, about a third of them “churned” and wound up back on Medicaid.  

The high rate of churn suggests that many are still eligible when they leave Medicaid, and their departure leads to periods without insurance that can limit and delay access to needed healthcare. With the Medicaid rules different in every state, the current situation suggests that millions will follow this path in the months ahead, losing Medicaid coverage and then churning.  

“Restarting eligibility reviews will reintroduce the issue of churn,” according to the Public Policy Institute of California, a nonpartisan research group. “The challenge for California will be to minimize the number of still-eligible people who fall through the cracks as this sweeping federal policy change sunsets.”