Facing Trump Administration pressure to make their Medicaid eligibility determinations more accurate, states are conducting more income checks, increasing paperwork, and ending coverage when their mail to enrollees is returned, all of it to ensure that nobody who isn’t eligible for Medicaid gets on the rolls. Accuracy is important, but it’s also important that 7.5 million children and adults who are eligible for Medicaid remain uninsured and that Medicaid’s enrollment of children has dropped by almost a million over two years.
If states focus only on ensuring that no ineligible people get Medicaid coverage — rather than also on ensuring those who are eligible can easily enroll, stay enrolled, and transition to other forms of coverage when their situations change — they will likely exacerbate the recent rise in uninsurance among both children and adults.
Efforts to increase the accuracy of Medicaid eligibility determinations should account for the reality of low-income people’s income and living situations, as I’ve explained. Medicaid eligibility is based on monthly income, which often varies for low-wage workers due to seasonal work, unsteady hours, and frequent job changes. Medicaid’s income limit is a precise percentage of the poverty line that considers family size, which can change as children grow up and leave the home, babies are born, and people get married or divorced.
Quarterly wage checks may identify people who are no longer eligible, but they also often find jobs that people no longer have, or they reflect overtime that people are no longer working. Checking wages to ensure that people are still eligible often causes eligible adults and children to lose coverage, because notices are often long, complicated, and confusing and they often give people little time to show that they’re still eligible.
Some people may not even get the notices and many others don’t understand what they have do after they read them. A recent New York Times article described a mother who brought her 9-month-old baby to the hospital and only then discovered that he no longer had Medicaid. Moreover, when states find people are no longer eligible for Medicaid, they often don’t give them the information or help they need to remain insured by getting subsidized coverage in the marketplace.
People with unstable housing, moving from place to place or winding up on the street, may not even receive a notice that they may lose their Medicaid coverage. If states kick them off Medicaid based on one piece of returned mail without doing more to reach them, as Arkansas and other states are doing, they’ll cut off many eligible people, including children, and increase “churn” — i.e., when eligible people go on and off coverage.
Many people re-apply and eventually re-enroll in Medicaid. But coverage gaps hurt people when they can’t see a doctor or get their prescriptions filled, research shows. Meanwhile, health care providers can’t effectively manage care for people who churn in and out of coverage. And states have to do more paperwork to re-enroll people who are still eligible back into Medicaid.
States can take steps to ensure that they don’t enroll ineligible people into Medicaid while also ensuring that people who are eligible can easily enroll and remain enrolled. Most importantly, they can adopt 12-month continuous eligibility to avoid coverage gaps that can result from small income fluctuations. To date, 24 states have adopted continuous eligibility for children in Medicaid, and 26 have adopted it for their Children’s Health Insurance Programs. Two states, Montana and New York, have adopted continuous eligibility for adults through a federal waiver.
States can also reduce churn and improve accuracy by adopting new and better ways to communicate with Medicaid beneficiaries, such as with text messages and easier reporting through online portals. They can update addresses through the postal service’s National Change of Address database and try to reach people by phone, text messages, or email when they receive returned mail. And they can make sure that people who are no longer eligible for Medicaid can make the transition to subsidized marketplace coverage.
Some critics say that recent audits of state eligibility processes show widespread beneficiary fraud, and they’re using these audits to push for measures that will cause more eligible people to lose coverage. As we’ve explained, however, these audits identify human and system errors, many of which states have now addressed, not beneficiary fraud. In some cases, the errors didn’t affect whether people were eligible for Medicaid, only the federal reimbursement amount that states could claim.
The Affordable Care Act provides a continuum of coverage for low-income adults, including a state option to expand Medicaid to many more low-income adults and subsidized individual market coverage for those with incomes too high to qualify for Medicaid. Keeping people covered requires that states focus on the accuracy of their eligibility determinations in both directions, not just on ending coverage for those they think may no longer qualify.