500,000 Texans have been dropped from the Medicaid rolls since April

July 17, 2023

"500,000 Texans have been dropped from the Medicaid rolls since April" was first published by The Texas Tribune, a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.

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Half a million Texans have lost their Medicaid coverage since April, mostly for procedural reasons like not responding to messages from the state.

Preliminary data, released Friday by the state’s Health and Human Services Commission, paints a grim picture of Texas’ early efforts to redetermine Medicaid eligibility for the first time since COVID-19 hit three years ago.

Nowhere was this “unwinding” going to be easy. But Texas — with its high uninsured rates, strict rules to qualify for Medicaid and persistent delays in verifying eligibility — was on particularly poor footing to handle the sudden influx of renewals.

Now, hundreds of thousands of Texans are scrambling after suddenly losing health insurance — and the consistent care from trusted health care providers that it enabled them to access. Meanwhile, advocates say many of the people who lost coverage may actually still be eligible, and they’re calling for the state to pause redeterminations until they can ensure low-income children don’t fall through the newly apparent cracks in the renewal system.

“If the high percentage of procedural denials continues, then Texas is on the verge of knocking a lot of eligible kids off of their health insurance,” said Diana Forester, director of health policy at Texans Care for Children. “If state leaders can’t quickly pivot to a more effective process, then they should consider pausing the Medicaid removals until they can get this right.”

Unwinding after three years

Texas is one of just 11 states that has not expanded Medicaid eligibility under the Affordable Care Act, and the state has the highest rate of uninsured residents in the country. Before the pandemic, Medicaid in Texas mostly served children, disabled adults and pregnant women up to two months postpartum.

Once the pandemic hit in March 2020, federal regulations prohibited moving anyone off of the program. The extended coverage allowed about 3 million Texans to continue receiving Medicaid after they normally would have been removed from the program.

Federal funding legislation lifted those protections in April, kicking off a yearlong process for states to determine who should remain on Medicaid and move those who do not onto other state programs or into the public health insurance marketplace.

“Texas’ normal rules are the most restrictive in the United States,” said Anne Dunkelberg, senior fellow at Every Texan, a health care advocacy group. “We were carrying all of these desperately poor parents for the entire pandemic period, and we knew the lion’s share of them would not requalify.”

In the first month of this process, Texas reviewed the eligibility of almost 800,000 people. The state has not released demographic data, but said they are starting with people who likely no longer qualify for the program, like people who have aged out or those who no longer have an eligible child in their home.

Of those initial cases, about 111,000 people were determined to still qualify for Medicaid or the Children’s Health Insurance Program. About 95,000 people were found to no longer qualify.

But an additional 400,000 people were moved off of Medicaid for procedural reasons, meaning the state terminated their coverage without reviewing their eligibility. This includes people who didn’t submit the renewal packet the state sent through the mail or via YourTexasBenefits.com within 30 days.

“The review process is confusing and frustrating for families,” says Graciela Camarena, child health outreach program director at Children’s Defense Fund Texas, who helps families in the Rio Grande Valley navigate public benefit programs.

Camerana said in a statement that clients have received notices at old addresses, in a language not listed as their primary language or after the deadline had already passed. The state worked with advocates, health care providers and insurers to try to get the word out about the upcoming renewal process, but procedural errors and delays hamstrung the process even when people were aware of the steps they needed to take.

“We have even seen families receive multiple letters at the same time — one saying they qualify, another saying they do not,” Camarena said. “The issue is the process, not the people. These are mostly parents just trying to give their children a chance to stay healthy.”

In a statement, HHSC spokesperson Tiffany Young said the agency used a “multi-pronged” strategy to reach people, including mailing notices, sending text messages, hosting events and collaborating with community partners. The state is also urging everyone who currently receives Medicaid or CHIP benefits to ensure their information is up to date at YourTexasBenefits.com.

Nationally, 75% of removals were for procedural reasons, compared to 81% in Texas. But researchers worry that Texas’ particularly strict Medicaid regulations mean there’s a greater risk for greater harm.

“Kids’ eligibility doesn’t change as much,” said Gaby Aboulafia, a health policy Ph.D. student at Harvard University who is studying the unwinding. “Because the state hasn’t expanded, we can say with a lot of confidence that many of these people who were inappropriately kicked off were kids who are actually probably still eligible.”

Research shows that any gap in coverage, even just a few months, can have devastating financial and health consequences for families, Aboulafia said.

Texas’ new data also shows the state is not taking advantage of other tools to determine eligibility. Less than 1% of people had their eligibility reviewed through the “ex parte” system, which allows the state to verify eligibility using third-party data like federal benefits information.

“More people end up achieving coverage through this automatic renewal, because they don’t have to provide any updated information,” Aboulafia said. “It’s the biggest thing Texas can do to ensure that people retain their coverage.”

Some states are relying heavily on this administrative review, with a quarter of states using ex parte data for a majority of their renewals. In the data released Friday, HHSC noted that the rate of approvals with third-party data is expected to increase as the agency begins reviewing cases that are more likely to continue to qualify for Medicaid. But Texas has long lagged the national average in ex parte reviews, due in part to onerous regulations like refusing to accept income data more than two months old, Dunkelberg said.

While the Texas House passed a bill that would have expanded HHSC’s ability to use the ex parte system to verify children’s eligibility for health insurance, the Senate did not pass the measure.

The Legislature also granted only $111 million of the $143 million HHSC requested to support the anticipated surge in Medicaid renewals.

Young said the state is on schedule to complete the redetermination process as planned. With another 3.6 million cases expected to be up for review in the next three months, including many new mothers, the gap between what advocates hoped for and what Texas is delivering is only expected to widen.

“The Governor can mitigate these harms by pausing to examine why this is happening—and fix it,” said Adrienne Lloyd, health policy manager at Children’s Defense Fund-Texas. “We urge him and Texas leaders to … take advantage of the full timeline and flexibilities offered by the Center for Medicaid and Medicare Services to complete this process — so that Texas does not continue to wrongfully remove children, seniors, and people with disabilities from their health care.”

Disclosure: Every Texan and Texans Care for Children have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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This article originally appeared in The Texas Tribune at https://www.texastribune.org/2023/07/17/medicaid-texas-removed/.

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