Medicaid disaster looms, but it can be avoided | Notice [Boss Insurance]

Medicaid Disaster Looms, But It Can Be Avoided |  Notice

Two weeks ago we saw a win and a loss for health care. North Carolina has become the 40th state to expand Medicaid under the Affordable Care Act. It’s a big win for the estimated 600,000 low-income adults in North Carolina who will now be eligible for government insurance and join the millions of eligible adults in other Medicaid expansion states.

As for defeat, a federal program expired that had kept Americans on Medicaid during the pandemic, regardless of changes in their circumstances that would normally have caused them to lose their insurance. The practice, called continuous enrollment, has been a major driver of the two percentage point drop in the fraction of people without health insurance since the start of the pandemic.

Now, continuous enrollment is gone, and according to the Department of Health and Human Services, some 15 million of the 87 million adults enrolled in the program will likely lose their Medicaid coverage in the coming months, reversing some of the recent progress in in reducing the rate of the uninsured. . Not only that, but nearly 7 million of them will lose their Medicaid coverage even though they may still be eligible simply due to administrative issues, which are common in the program and are often due to difficulties in contacting beneficiaries.

For more than a decade, studies have revealed the benefits of Medicaid expansion, including increased use of health services, better mental health, and more stable finances. Federal Reserve Board economist Kenneth Brevoort and his co-authors estimated that in the first few years, Medicaid expansion reduced unpaid medical bills sent for collection by $3.4 billion, prevented new defaults, and increased credit ratings. In addition to care, Medicaid helps people avoid spiraling financial costs that illness can cause without insurance.

But getting health insurance is only the first step. What people need is continued health insurance, not necessarily continued Medicaid enrollment.

Many people on Medicaid receive neither. The average length of Medicaid was 8.6 months for able-bodied adults under 65 before the pandemic, and two-thirds of those who left had no health insurance through the next year. . Such gaps in health insurance underscore why the indefinite continuous enrollment program during the pandemic has been critical in reducing the uninsured rate and providing continuous health insurance. But that’s not a long-term solution because of the costs of the program and Medicaid’s mission to serve the poor. Even so, a solution is needed because without continued health insurance, many who leave Medicaid will not be able to continue their health care due to the cost.

The administration of Medicaid often unintentionally complicates the goal of continued health insurance. Errors in judgment about whether household income is above the program limit of 138% of the poverty line are common errors. While the registration period is 12 months, most states verify eligibility data during the year. This is a problem for people whose income varies considerably from month to month. Looking at a snapshot of earnings could incorrectly show them ineligible for Medicaid. People with flagged eligibility only have 10 days to resolve issues. And those who face a surprise loss of coverage may not be well placed to get it elsewhere.

Some groups, such as seasonal and part-time workers, are more likely than others to lose their Medicaid coverage by mistake, according to the Kaiser Family Foundation, a nonpartisan health policy think tank. Black or Hispanic Americans, or those with less education, are more likely to work in jobs with widely varying incomes, so they are at high risk of losing their insurance coverage.

There are ways Medicaid can better support continuity of health insurance during and after the program. First, Medicaid should provide health insurance for the entire 12-month enrollment period, regardless of any change in circumstances. This is a middle ground between continuous and indefinite enrollment in the pandemic program and the pre-pandemic program in which intermediate data checks could lead to loss of insurance and are sometimes erroneous. Currently, children and pregnant women in some states have time-limited ongoing enrollment.

Additionally, Congress should extend 12-month enrollment protection to all Medicaid recipients. This would remove the penalty for workers whose earnings fluctuate from month to month, which periodically puts earnings above the threshold. It would also give everyone on Medicaid certainty about when their eligibility will be reviewed so they don’t unexpectedly lose their coverage.

Second, instead of de-enrolling individuals from Medicaid who are flagged during an interim data check, initiate a process with other federal and state agencies to help the individual explore other insurance options. People in Medicaid expansion states have access to federally subsidized insurance through the stock market, but it’s a complicated set of options to navigate. Even so, with more guidance and time to think, opting out of Medicaid could be associated with signing up for other insurance. Steps to support continued insurance also save Medicaid money. Currently, one in 10 beneficiaries makes a round trip to the program in one year, which increases the costs of the program.

Finally, the remaining 10 states are expected to embrace Medicaid expansion. It’s the easiest way to ensure that more people have health insurance and can access affordable health care. It is also important for continuity of insurance because, without the expansion, a gap exists between standard Medicaid and subsidized insurance on exchanges. This makes it much harder for someone to find health insurance when they leave Medicaid. Plus, now is the time to expand because of Congress’s even more generous cost-sharing financial incentives.

(Claudia Sahm is the founder of Sahm Consulting and a former Federal Reserve economist.)