Medicaid disenrollments pass 10M as states continue eligibility checks

Dive Brief:

  • More than 10 million low-income Americans have lost Medicaid coverage as states continue checking eligibility for the safety-net program following the pandemic.
  • The U.S. passed that marker as of Nov. 1, according to a tracker by health policy nonprofit KFF, which started collecting data on Medicaid enrollment in April when states could begin redeterminations.
  • To date, 35% of the 28 million people with a completed renewal were disenrolled, while 65% had their coverage renewed. Disenrollments vary widely by state — Texas has the highest disenrollment rate at 65%, while Illinois has the lowest at 10%, KFF found.

Dive Insight:

Disenrollment rates have been rising steadily since this summer, as more states start rechecking their Medicaid members’ eligibility for the program.

The Biden administration enticed states to put those checks on hold during the COVID-19 public health emergency in exchange for more generous federal funding. That continuous enrollment period caused Medicaid’s rolls to swell to some 94 million people earlier this year, making the program the largest source of insurance coverage in the U.S. during the pandemic.

Millions of people were expected to lose coverage at the end of Medicaid unwinding, though the actual number is currently very much in flux. Patient advocates, Democrat lawmakers and health policy researchers have raised concerns about redeterminations, as high numbers of people have lost coverage for administrative errors, not actual ineligibility. In addition, states’ different strategies are complicating efforts to get a clear national picture of how redeterminations are playing out.

Disenrollment figures are almost certainly an undercount, due to data lags, KFF noted.

But across states with available data, 71% of all people disenrolled lost coverage for procedural reasons like not filling out paperwork by the deadline, or the state being unable to contact them. That’s a small dip from earlier this year, when the KFF found 74% of terminations were procedural.

The Biden administration has taken a number of steps in an effort to curb procedural disenrollments, including offering states more flexibility in how they pursue redeterminations. To date, all states have taken the CMS up on the additional assistance, except Florida.

Regulators have also threatened state agencies with sanctions over an administrative glitch that improperly removed children from Medicaid coverage, and forced states with high levels of procedural terminations to pause redeterminations.

Those actions are resulting in more Medicaid members rejoining the program after being kicked off, according to health insurance executives.

In recent third-quarter earnings calls, Centene, Molina and Elevance — all of which contract with states to manage the care of their Medicaid beneficiaries — said they’re seeing the rate of reconnects accelerate as compared to earlier this year.

In addition, states are revising rates to reflect changing acuity as payer’s membership rolls change, which should insulate insurers from extreme unexpected medical costs.

Despite that, however, redeterminations continue to stress payers’ financial outlooks. Earlier this year, Centene lowered its 2024 earnings guidance due to expectations that Medicaid redeterminations will increase spending and lower premium revenue next year. And Molina in October lowered its member retention expectations after redeterminations are completed, from 50% to 40%.