States set to pare back bloated Medicaid rolls as COVID-related extra funding runs out

States set to pare back bloated Medicaid rolls as COVID-related extra funding runs out

Medicaid rolls swelled during the coronavirus pandemic, but could shrink substantially in April when state governments end a three-year moratorium on checking eligibility requirements.

Medicaid added 20.2 million people to its rolls between February 2020 and October 2022 alone, costing the federal government $592 billion. The surge came after Congress passed legislation in March 2020 requiring states to maintain continuous Medicare coverage for enrollees.

“Congress recognized the urgent need to protect those most at risk in our country of losing health care and passed legislation to ensure that no one could be disenrolled from Medicaid during the public health emergency,” said Rep. Judy Chu, California Democrat. “This historic measure was a lifeline to millions of families struggling across the country.”

The legislation served, in effect, to prohibit states from removing anyone from their Medicaid rolls regardless of whether they were still eligible. It did so by requiring states to provide continuous coverage in exchange for enhanced federal funding for Medicaid.

The additional money was a boon for most jurisdictions as Medicaid is funded through a 50-50 cost-sharing program between the federal government and states.

Coronavirus relief legislation passed in March 2020, however, boosted the federal government’s subsidies by $6.20 for every $100 a state spent. The Kaiser Family Foundation estimates that even as state expenditures for Medicaid have grown, the enhanced federal funding has exceeded those costs.

“For a lot of states, this was a no-brainer, they got more federal money, without having to spend on administrative costs associated with disenrolling beneficiaries,” a senior GOP aide working on health-care issues told The Washington Times.

“There are likely 5-to-15 million people on Medicaid right now that are no longer eligible for it,” the aide said.

Last year, Congress passed a $1.7 trillion government spending bill that begins phasing out the enhanced matching funds for Medicaid. Starting in April, states will only get an additional 5% in matching funds until the end of June. The sum will then fall to 2.5% through the end of September, before falling to 1.5% for the rest of the year.

By the beginning of 2024, the enhanced funding will run out fully. Lawmakers say the timeline is sufficient to ensure that states can review Medicaid rolls and determine which beneficiaries are still eligible.

“Medicaid was always intended for the aged, blind, and disabled — for the least in our society, who need help the most,” said Rep. Buddy Carter, Georgia Republican. “Trying to get back to that would probably be beneficial.”

The Department of Health and Human Services estimates that as many as 15 million people nationwide could lose Medicaid coverage once the enhanced funding runs out. Of that 15 million figure, HHS estimates at least 6.8 million will still be eligible for Medicaid.

Since states have wide latitude in setting their own income and work requirements for Medicaid, the eligibility standards will differ widely. But states will have to comply with federal guidelines on how to inform individuals they have been disenrolled or have to register for Medicaid.

Adding to the confusion is that low-income individuals could have moved since the onset of the pandemic making such contact difficult. Some states have already launched programs to update contact information for Medicaid enrollees before moving forward with reviewing their rolls.

Rep. Nannette Baragan, California Democrat and Congressional Hispanic Caucus Chair, said there were numerous administrative issues that could be an impediment to keeping eligible individuals enrolled in Medicaid.

“For example, making sure that there are fully staffed call centers to answer questions about eligibility,” she said. “Making sure those call centers must be able to speak to non-English [speaking] residents [or the] bilingual.”

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