States need to evaluate how to limit coverage loss; CMS should be ready to act

 By Suzanne Wikle 

With the end of COVID-era protections that kept people enrolled in Medicaid, states are undertaking the large task of initiating and processing Medicaid renewals. As we wrote about in April, this “unwinding” from the Medicaid continuous coverage period greatly varies across states. In May we began to see data from states that have completed the first renewal cycle and disenrolled people who are either no longer eligible or—more likely—haven’t completed the renewal process.  

We need more months of data, combined with on-the-ground examples and stories to fully understand the picture, but the early data paints a troubling picture. Most concerning is the rate of procedural disenrollments being reported by states. With a procedural disenrollment, there’s no finding of ineligibility, so people who are disenrolled for procedural reasons are often still eligible but lose their coverage because they didn’t complete the renewal process. Reasons for people not completing their renewals include not receiving the information at their current address, not having the information available in their preferred language, or not being able to navigate the burdensome process. 

Here’s a sampling of the data available: Florida disenrolled 249,427 of 461,322 people who were up for renewal in April. The procedural denial rate was 82 percent, meaning that 205,122 people lost coverage not because they were determined ineligible but because their renewal process was not completed. Many were likely unable to navigate the paperwork and red tape. The Center for Children and Families at Georgetown highlights that many disenrollments are likely children since Florida has not yet expanded Medicaid. Arkansas reported that 55 percent of people up for renewal lost coverage, and 72 percent of terminations were procedural. However, Pennsylvania paints a different picture: Pennsylvania reports that of the renewals processed so far 68 percent retained coverage and 32 percent lost coverage. Of those that lost coverage, 43 percent were procedural and 57 percent were determined ineligible. The data from Pennsylvania and Florida could change as the states works through a backlog of renewals, but early indications show significant differences among their procedural denial rates. 

We know that Florida and Arkansas are prioritizing people who the state has reason to believe are no longer eligible in the early months of unwinding. That approach will likely cause a higher rate of procedural terminations, but the rates from the first month are surprisingly high and concerning. 

In June we will see more data from states that have already started disenrollments, along with new data from states that started disenrollments on June 1. Keep an eye on the unwinding watch from the Center on Budget and Policy Priorities and KFF’s unwinding tracker for updated data as it becomes available. 

As we see more data in June and subsequent months, we’ll have a clearer picture of whether the states with troubling data continue to disenroll people at extraordinary rates, particularly when the disenrollments are largely procedural. States have been preparing for the “unwind” for close to a year and have been given multiple tools by the Centers for Medicare and Medicaid Services (CMS) to ease their workload and help ensure eligible people stay enrolled. CMS has been working with states to help them prepare for the large undertaking of unwinding and provide support as needed. However, we know that states are at different places of readiness and vary in their efforts to minimize procedural denials.  

Given the large number of disenrollments states are already reporting and the expectation of large disenrollment numbers in other states (e.g., Texas), we ask CMS to recognize that every month is critical for minimizing coverage loss. CMS should continue working closely with states and push them to use all options to limit coverage loss, but CMS should also be ready to use its own tools. This includes stepping in and directing states to make operational changes or, ultimately, pausing procedural terminations. States administer Medicaid within federal standards, so a certain amount of data variation across states is to be expected. But during this critical period following the end of COVID-era protections, CMS must use all its tools to act as a backstop when state data show significant coverage loss, particularly procedural terminations. 

The Consolidated Appropriations Act (CAA) in late 2022 gave CMS the authority to take more active steps in states when necessary. For states that are not adhering to renewal regulations, CMS can put them on Corrective Action Plans (CAPs) to mitigate coverage loss and, as part of those CAPs – when warranted – stop procedural disenrollments until the state can demonstrate improvement. CLASP recognizes that one month of data shouldn’t lead to these oversight procedures, but we urge CMS to continue its close monitoring of states where early data indicates problems and use the authority provided by the CAA to place states on CAPs and halt procedural denials where needed.