White House urges states to slow Medicaid cuts

The Biden administration is imploring states to slow down their efforts to cut people from Medicaid after more than a million Americans lost coverage, including many because of red tape, even though they were still eligible.

Administration health officials from the Centers for Medicare and Medicaid Services (CMS) on Tuesday said they were closely monitoring state data and were concerned about the high numbers of people losing coverage. They said if states were not following federal law, the agency would take action.

"When it is needed, we will not hesitate to use all of our enforceable enforcement tools to ensure that states are doing what they are required to do throughout the renewals," CMS Administrator Chiquita Brooks-LaSure said on a call with reporters. 

Medicaid enrollment hit record high numbers amid the COVID-19 pandemic because states weren't allowed to end coverage. But that safety net ended in April and states started to determine — for the first time in three years — who was eligible for Medicaid.

According to an analysis of that data by KFF, the median disenrollment rate is 44 percent, but there is wide variation across states ranging from 12 percent in Nebraska to 73 percent in Idaho.

In some states, more than 80 percent of people who lost coverage were due to what CMS described as “procedural reasons,” such as the failure to return forms.

Before the pandemic, people “churned” in and out of Medicaid for various reasons. People lost their coverage if they earned too much or didn’t provide the information needed to verify their income or residency. 

The Biden administration has been working with state officials to minimize churn. But even in the best of times, states have sent mail to the wrong address, or people move frequently and can’t easily be reached. 

"The reality of our healthcare insurance system is that coverage transitions are not seamless. It takes time and effort to ensure individuals and families make their way back to health care coverage that meets their needs," Brooks-LaSure said. 

In a letter to governors sent Monday, Health and Human Services Secretary Xavier Becerra decried the massive coverage losses and urged states to adopt all available flexibilities to minimize avoidable coverage losses among children and families.  

“I am deeply concerned with the number of people unnecessarily losing coverage, especially those who appear to have lost coverage for avoidable reasons that State Medicaid offices have the power to prevent or mitigate,” he wrote.

In a statement released with the letter, Becerra said nobody “should lose coverage simply because they changed addresses, didn’t receive a form, or didn’t have enough information about the renewal process."

The Biden administration is giving states a year to go through the once-routine process of sorting through Medicaid rolls, though some are moving much faster. 

Arkansas for instance is speeding through the redetermination process in only six months, citing cost concerns and the goal of Gov. Sarah Huckabee Sanders (R) to push people to “escape the trap of government dependency.” 

More than 110,000 people have been removed from the state's Medicaid rolls to date, according to KFF; 82 percent of them have been for procedural reasons.

State officials on June 8 said in a statement there were "significant efforts" made to find and notify beneficiaries before the disenrollments began.

Those efforts "should not be discounted because of the number of beneficiaries whose coverage ended due to failing to return a renewal packet," the Department Of Human Services said. 

"We will continue ... to swiftly disenroll individuals who are no longer eligible, as this ensures that Medicaid resources go to beneficiaries who truly need them," the agency said.

Becerra in his letter outlined strategies states could use, including spreading out the renewals over the next 12 months, as well as pausing the cancellations to allow more time to reach people who haven’t responded to letters.

CMS Deputy Administrator Daniel Tsai acknowledged that the administration can't force states to take up certain strategies, but they want governors to do more than the bare minimum required by federal law. 

"I don't think it's an exaggeration to say that millions of Americans' health care coverage is at risk," Tsai said.