Federal officials have uncovered significant errors in the systems and procedures used by certain states to verify eligibility for Medicaid. As a result, many children may lose health coverage even though they are still eligible for it.
State agencies have been reversing a pandemic-era policy that allowed individuals to maintain their Medicaid coverage without regular eligibility checks. Since April, at least a million children have lost coverage, despite having higher eligibility limits than adults.
In a letter to state Medicaid agencies, Daniel Tsai, a senior official at the Centers for Medicare and Medicaid Services, cautioned that technical errors may be responsible for many people being disenrolled.
During a press briefing, Mr. Tsai highlighted that the problem stemmed from a specific systems glitch that could have significant consequences for eligible children and their families. Many states conduct automatic eligibility checks that rely on databases, such as state wage records. However, some states have been disenrolling individuals if renewal forms requesting information for all household members are not returned, including those who should have been deemed eligible through the automatic process.
Officials have noted that this practice disproportionately affects children. In response, the administration has directed states to fix their eligibility systems, pause removals, and reinstate those impacted by the errors.
The letter represents one of the most assertive actions taken by federal officials as they unwind the pandemic-era policy, which has resulted in over 5.5 million people losing coverage according to analyzed state data from KFF.
Mr. Tsai declined to disclose the affected states but did mention that state agencies have two weeks to identify and report this issue to the federal government. A spokesperson later revealed that over a dozen states believe they have been impacted.
From the beginning of the pandemic until April, states were prohibited from discontinuing Medicaid coverage due to a provision in a congressional relief package. This law, coupled with additional federal funding, led to record enrollment, with 93 million people enrolled in Medicaid or the Children’s Health Insurance Program earlier this year.
Before the unwinding process began, the Georgetown University Center for Children and Families estimated that over half of all children in the US were covered by Medicaid or CHIP.
The discontinuation of the coverage preservation requirement has resulted in catastrophic consequences for low-income families and children. Data from 15 states analyzed by KFF indicates that at least 1.1 million children have lost Medicaid coverage since the policy ended. However, some states have not released age-specific data, limiting our understanding of the impact on children.
Children have higher eligibility limits for Medicaid and CHIP, and thus were expected to have a larger proportion of beneficiaries. Public health experts have long feared that coverage losses were due to errors on the part of state Medicaid agencies.
Joan Alker, the executive director of the Georgetown center, emphasized that children are eligible for Medicaid or CHIP up to 2.5 times the federal poverty level. Losing coverage leaves them with limited options for health insurance, particularly concerning for their regular healthcare needs.
“The coverage losses among children are most significant in Texas, where the state has a large population of Medicaid-insured kids and has not expanded its Medicaid program under the Affordable Care Act,” stated the report. Texas saw over 600,000 people lose Medicaid coverage during the unwinding process, the highest total nationwide.
In Kansas, more than half of those losing Medicaid coverage are children. Medicaid has become crucial for low-income earners in rural areas where jobs may be scarce or poorly paid. Health care advocates in the state had pushed for automatic eligibility checks during the unwinding process but did not anticipate the potential pitfalls.