Federal authorities have raised concerns about the improper removal of potentially millions of children from Medicaid rolls in various states. This issue has arisen as states attempt to determine eligibility for Medicaid, following the expiration of a pandemic-era promise allowing everyone to remain in the program. The Biden administration is closely monitoring this process to prevent a rise in uninsured individuals due to paperwork issues or loss of eligibility. The problem lies in incorrect computer systems that fail to assess individual family members' eligibility accurately. In response, the federal agency overseeing Medicaid has sent a strongly worded letter instructing states to evaluate their compliance and halt renewals if necessary. Children and others who have been wrongly dropped must be reinstated with retroactive coverage. The exact number of states affected and the total number of children impacted remain unclear, but it is believed to be a widespread issue affecting many states. The Centers for Medicare and Medicaid Services estimates that more than a dozen states have eligibility system flaws. An anonymous administration official suggests that the number of affected children could be in the millions, and the problem is systemic. The Georgetown Center for Children and Families estimates that approximately half of the states are improperly removing children, potentially impacting millions of children based on partial data. Only 15 states have publicly disclosed the number of children who have lost Medicaid coverage, totaling 1.1 million out of 2.7 million beneficiaries overall.
The process of unwinding Medicaid, which is expected to take about a year in most states, comes after the expiration of a federal law that provided temporary coverage guarantees for three years until March. During the time between the start of the pandemic and the end of the enrollment guarantee, Medicaid enrollment increased by one-third nationwide, reaching 85 million by late last year.
Children are particularly vulnerable to the issue identified by the Centers for Medicare and Medicaid Services (CMS) due to Medicaid eligibility rules. Even if their families have incomes higher than the threshold for their parents to qualify, children can still be eligible for insurance. The problem arises when Medicaid programs use automated methods, such as computerized data like wage records, to determine eligibility. This method, preferred by the federal government over sending renewal notices, accounts for about one-fourth of renewals nationwide.
According to CMS Administrator Chiquita Brooks-LaSure, the issue occurs when states consider a family's entire income to determine eligibility for both parents and children, rather than recognizing that children often have higher income thresholds for eligibility. This issue can also arise in families with different immigration statuses that affect insurance eligibility.
In response to the problem, CMS sent a letter on Wednesday instructing states to address the issue immediately and offering options for corrective action. One option is to provide children with an additional year of automatic Medicaid coverage. Failure to comply may result in penalties, including financial consequences.
CMS acknowledges that states may face significant challenges in resolving this issue. Kate McEvoy, executive director of the National Association of Medicaid Directors, agrees that it is a substantial undertaking for states. She explains that the problem of using family incomes instead of individual incomes, which affects children, only emerged as a compliance matter two weeks ago. During preparations and consultations with federal health officials before the unwinding process began, the handling of income checks in automated renewals was not prioritized.
Joel D. Ferber, an attorney with Legal Services of Eastern Missouri, expresses suspicion about the high number of children being cut off from Medicaid. Missouri, one of the states disclosing age breakdowns of Medicaid beneficiaries losing coverage, reports that half of those affected are children.
Caitlin Whaley, communications director for Missouri's Department of Social Services, states that the state's Medicaid program does not have the problem identified by CMS. She adds that Missouri has been in communication with CMS regarding its eligibility system, which does not currently conduct automated renewals and terminations.