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The Unfolding Medicaid Disaster

THE LEVER, Andrew Perez, Nick Byron Campbell, June 25, 2023

Now that Biden and Congress have ended pandemic protections, nearly a million have lost Medicaid coverage for procedural reasons so far — and many more will.

As states have begun clearing out their Medicaid rolls for the first time since the start of the COVID-19 pandemic, nearly three quarters of the Americans who’ve lost coverage have been terminated not because they’re ineligible for the low-income health insurance program, but due to administrative reasons, such as failing to quickly respond to a piece of mail.

In February, President Joe Biden bragged in his State of the Union speech that “more Americans have health insurance now than ever in history.” Biden made that comment six weeks after he set the stage to massively increase the United States’ uninsured population, when he signed legislation from Congress ending the pandemic-era requirement that states maintain Medicaid beneficiaries’ coverage in exchange for extra federal funding.

The measure, passed as part of a year-end spending bill, allowed states to begin mass disenrollments starting in April — a policy decision that is naturally a boon for government contractors that states pay to identify beneficiaries they could potentially remove from the program.

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Now that states have resumed annual Medicaid eligibility reviews, an estimated 17 million people, and potentially up to 24 million, could lose Medicaid coverage. According to early data from the Kaiser Family Foundation, more than 1.5 million Americans have already lost coverage, and 1.1 million have lost their health insurance for arbitrary reasons, not because they aren’t eligible.

The Biden Health and Human Services Department (HHS) estimated last year that roughly 45 percent of people who would lose Medicaid coverage once states could begin disenrollments would have their insurance canceled for procedural reasons despite being eligible for the program. The actual proportion of Americans being terminated for such procedural reasons appears to be far higher — 73 percent — according to the latest Kaiser data.

At a health insurance industry conference last week, one lobbyist admitted that the country is witnessing “distressing levels of administrative procedural disenrollments.” A top official from an organization representing state Medicaid directors downplayed those numbers, arguing that it’s too soon to jump to any conclusions.

“In terms of the data we’re starting to see, I think we need to proceed with caution,” Dianne Hasselman, deputy executive director of the National Association of Medicaid Directors, said at a health insurance industry conference last week. “It is very early. We can’t make huge assumptions about the data.”

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