Category Archives: Medicaid Unwinding

Musk’s DOGE could leave millions uninsured

Posted on by • Posted in ACA, Health Insurance Coverage Adequacy, Health Policy, Healthcare Reform, High Deductible Health Plans, Medicaid, Medicaid Block Grants, Medicaid Eligibility, Medicaid Expansion, Medicaid Redeterminations, Medicaid Retroactive Eligibility, Medicaid Section 1115 Waiver, Medicaid Unwinding, Medicaid Work Requirements, Medical Debt, Out of Pocket Expenses, State of the Union, Underinsured, Uninsured, Unnecessary Deaths • Leave a comment

https://www.linkedin.com/pulse/musks-doge-could-leave-millions-uninsured-robert-pearl-m-d–xl8dc/?trackingId=7TewioXWRzScafytDRqrQQ%3D%3D

As Donald Trump begins his second term, America’s healthcare system is in crisis: medical costs are skyrocketing, life expectancy has stagnated, and burnout runs rampant among healthcare workers.

These problems are likely to become worse now that Trump has handed the federal budget over to Elon Musk. The world’s richest man now co-heads the Department of Government Efficiency (DOGE), a non-government entity tasked with slashing $500 billion in “wasteful” spending.

The harsh reality is that Musk’s mission can’t succeed without gutting healthcare access and coverage for millions of Americans.

Deleting dollars from American healthcare

Since Trump’s first term, the country’s economic outlook has worsened significantly. In 2016, the national debt was $19 trillion, with $430 billion allocated to annual interest payments. By 2024, the debt had nearly doubled to $36 trillion, requiring $882 billion in debt service—12% of federal spending that is legally untouchable.

Add to that another 50% of government expenditures that Trump has deemed politically off-limits: Social Security ($1.35 trillion), Medicare ($848 billion) and Defense ($1.13 trillion). That leaves just $2.6 trillion—less than 40% of the $6.75 trillion federal budget—available for cuts.

In a recent op-ed, Musk and DOGE co-chair Vivek Ramaswamy proposed eliminating expired or misused funds for programs like Public Broadcasting and Planned Parenthood, but these examples account for less than $3 billion total—not even 1% of their target.

This shortfall will require Musk to cut billions in government healthcare spending. But where will he find it?

With Medicare off limits to DOGE, the options for major reductions are extremely limited. Big-ticket healthcare items like the $300 billion in tax-deductibility for employer-sponsored health insurance and $120 billion in expired health programs for veterans will prove politically untouchable. One will raise taxes for 160 million working families and the latter will leave veterans without essential medical care.

This means DOGE will have to attack Medicaid and the ACA health exchanges. Here’s how 20 million people will likely lose coverage as a result.

1. Reduced ACA exchange funding

Since its enactment in 2010, the Affordable Care Act (ACA) has provided premium subsidies to Americans earning 100% to 400% of the federal poverty level. For lower-income families, the ACA also offers Cost Sharing Reductions, which help offset deductibles and co-payments that fund 30% of total medical costs per enrollee. Without CSRs, a family of four earning $40,000 could face deductibles as high as $5,000 before their insurance benefits apply.

If Congress allows CSR payments to expire in 2026, federal spending would decrease by approximately $35 billion annually. If that happens, the Congressional Budget Office expects 7 million individuals to drop out of the exchanges. Worse, without affordable coverage alternatives, 4 million families would lose their health insurance altogether.

2. Slashing Medicaid coverage and tightening eligibility

Medicaid currently provides healthcare for over 90 million low-income Americans, including children, seniors and individuals with disabilities. To meet DOGE’s $500 billion goal, several cost-cutting strategies appear likely:

  • Reversing Medicaid expansion: The ACA expanded Medicaid eligibility to those earning up to 138% of the federal poverty level, reducing the uninsured rate from 16% to 8%. Undoing this expansion would strip coverage from millions in the 40 states that adopted the program.
  • Imposing work requirements: Proponents argue this could encourage employment, but most Medicaid recipients already work for employers that don’t provide insurance. In reality, work requirements primarily create bureaucratic barriers that disqualify millions of eligible individuals, reducing program costs at the expense of coverage.
  • Switching to block grants: Unlike the current Medicaid system, which adjusts funding based on need, less-expensive block grants would provide states with fixed allocations. This will, however, force them to cut services and reduce enrollment.

Medicaid currently costs $800 billion annually, with the federal government covering 70%. Reducing enrollment by 10% (9 million people) could save over $50 billion annually, while a 20% reduction (18 million people) could save $100 billion.

Either outcome would devastate families by eliminating access to vital services including prenatal care, vaccinations, chronic disease management and nursing home care. As states are forced to absorb the financial burden, they’ll likely cut education budgets and reduce infrastructure investments.

The first 100 days

The numbers don’t lie: Musk and DOGE could slash Medicaid funding and ACA subsidies to achieve much of their $500 billion target. But the human cost of this approach would be staggering.

Fortunately, there are alternative solutions that would reduce spending without sacrificing quality. Shifting provider payments in ways that reward better outcomes rather than higher volumes, capping drug prices at levels comparable to peer nations, and leveraging generative AI to improve chronic disease management could all drive down costs while preserving access to care.

These strategies address the root causes of high medical spending, including chronic diseases that, if better managed, could prevent 30-50% of heart attacks, strokes, cancers, and kidney failures according to CDC estimates.

Yet, in their pursuit of immediate budgetary cuts, Musk and DOGE have omitted these kinds of reform options. As a result, the health of millions of Americans is at major risk.

Assessing the Results of Medicaid Unwinding

Posted on by • Posted in Children's Health Insurance Program (CHIP), Medicaid, Medicaid Unwinding • Leave a comment

https://www.kaufmanhall.com/insights/infographic/assessing-results-medicaid-unwinding

With the onset of the pandemic in March 2020, states were required to provide continuous enrollment for Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries in exchange for enhanced federal funding. This led to immense growth in Medicaid rolls that states could not begin to unwind until April 2023.

This week’s graphic illustrates the outcomes of Medicaid redeterminations—a process which most states completed by August 2024—and provides a comprehensive coverage update.

As this undertaking nears completion, most beneficiaries have had their Medicaid coverage renewed during redeterminations. Around 30% of recipients, or about 25M beneficiaries, lost Medicaid coverage. Nearly 70% of these cuts were made for procedural reasons, such as state agencies not processing beneficiaries’ documents before their cases closed or beneficiaries never receiving the renewal notices. 

Despite significant nationwide reductions, 8M more people were enrolled in Medicaid and CHIP in August 2024 than just before continuous enrollment began in February 2020. 

Throughout continuous enrollment, an elevated share in Medicaid and a lower uninsured rate were the most notable differences to a coverage landscape that has otherwise remained largely stable. 

Somewhat surprisingly, initial evidence suggests that the net effect of continuous enrollment and subsequent Medicaid redeterminations equaled out, and many former recipients have gained coverage elsewhere. 

While the national uninsured rate increased to 8.2% in Q1 2024 following a record low in 2023, the uninsured rate remains lower than it was in 2019.

The Broader Policy Implications of the Medicaid Unwinding Crisis

Posted on by • Posted in ACA, Dept of Health and Human Services (HHS), Health Policy, Medicaid, Medicaid Disenrollment, Medicaid Eligibility, Medicaid Unwinding • Leave a comment
https://www.commonwealthfund.org/blog/2023/broader-policy-implications-medicaid-unwinding-crisis?utm_campaign=Achieving%20Universal%20Coverage&utm_medium=email&_hsmi=284335326&_hsenc=p2ANqtz-9cKTOmNOeC5k4vFsoOsqgWZzPVzmRaP4iPfQkiFjawMrc4xNf2S55E2HQGhxyBBL_nAjQM5_JlMsXS0QFTxGrWRJs1ig&utm_source=alert

November 2023 marks seven months since the federal government began unwinding Medicaid’s pandemic-related continuous enrollment guarantee. Because Medicaid coverage is associated with improved access and better health outcomes, stabilizing enrollment throughout the public health emergency was a vital public health measure. Now states must grapple with the challenge of returning to normal operations, which means reviewing eligibility for more than 90 million beneficiaries. 

By early November, at least 10,135,000 people had been disenrolled. Overall, two-thirds of people had their coverage renewed while about one-third lost eligibility.

The rate of disenrollment during renewal varies greatly, depending on a state’s underlying Medicaid eligibility rules, capacity to process renewals, and strategies for simplifying the process and reducing risks of error. Illinois showed a disenrollment rate of less than 10 percent, while Florida’s rate was one-third. Disenrollment of children appears to be happening at a high rate, even though they should be protected because of the relatively generous eligibility standards governing children’s coverage under Medicaid and the Children’s Health Insurance Program (CHIP).

As of November, children’s enrollment was down by 2.2 million. 

Among those disenrolled, more than 70 percent lost coverage for procedural reasons, like failure to return forms or an inaccurate mailing address. High procedural disenrollments also likely reflect agency error (e.g., miscalculating earnings information), but available data do not track the proportion of procedural disenrollments that result from such mistakes.

The high procedural disenrollment problem is exacerbated by the speed at which some states are acting — far faster than required under the federal 12-month unwinding timeline allowed by Congress. 

Compounding matters, anecdotal evidence suggests that people terminated for procedural reasons are also being turned away from the health insurance marketplace because states close cases without determining if beneficiaries are truly ineligible for Medicaid. This is happening even though marketplaces and Medicaid agencies are supposed to coordinate activities to ensure that people losing Medicaid can obtain marketplace coverage if eligible. 

The numbers are staggering. Texas has disenrolled more than 1.2 million people; Florida’s disenrollments have exceeded 730,000.

Disenrollment rates are the result of a complex process, excessive speed, and overtasked workers, along with states’ underlying eligibility rules for low-income children and adults. If these rules are more restrictive, they increase the disenrollment rate. In states that have not adopted the Affordable Care Act (ACA) expansion, the potential for major coverage loss is far higher. In nonexpansion states, the rules for poor adults (who had coverage throughout the pandemic, including postpartum women or teenage children who have now reached young adulthood) require an extremely low income level — 16 percent of the federal poverty level in Texas or about $4,000 annually for a family of three in 2023. As stated previously, the disenrollment of children has been far higher than expected, affecting even newborns during the first year of life when enrollment is guaranteed. 

The ACA streamlined and simplified Medicaid’s historically complex enrollment and renewal process by eliminating in-person interviews, automating data collection functions, and instituting an ex parte process, in which the state performs reviews without placing unnecessary renewal burdens on beneficiaries. In addition, a historic 1970 Supreme Court decision governing due process protections for people receiving means-tested public assistance benefits requires states to fully and comprehensibly explain in writing why coverage is ending and gives beneficiaries the opportunity to contest a termination decision before it takes effect. These constitutional safeguards are especially crucial to Medicaid because termination implicates not only coverage, but access to health care itself. 

In 2022, long after the ACA simplification reforms were instituted, the U.S. Department of Health and Human Services (HHS) concluded that of the 15 million people estimated to lose Medicaid during the unwinding process, nearly 45 percent would lose coverage because of procedural issues associated with navigating the renewal process. HHS also foresaw that children and younger adults (including very poor parents) would be disproportionately affected. The evidence appears to be bearing both predictions out. 

The federal government and advocates have begun to take action to mitigate erroneous coverage loss. The 2022 unwinding legislation empowers the HHS Secretary to impose corrective action plans in states showing excessive procedural disenrollments. In states that fail to comply with such plans, HHS would “require the State to suspend . . . terminations of eligibility for medical assistance . . . that are for procedural reasons until the State takes appropriate corrective action.” Under this special power, HHS has urged states to guard against improper disenrollments without an individualized ex parte review and also ordered reinstatement of a half-million children and adults disenrolled simply because other family members were no longer eligible. The agency has ordered states to halt disenrollment until corrective action is taken. 

In a first-of-its-kind case, beneficiaries in Florida who have lost coverage without required constitutional protections have sued for reinstatement and to halt further disenrollment. Plaintiffs include children (some with serious disabilities) and adults. The complaint describes state notices that are incomprehensible by people with average education and that fail to convey which family members are losing coverage, why coverage is being lost, and the right to a pre-termination hearing. Beneficiaries in other states may follow suit. 

The current unwinding situation presents a unique challenge for states, health care providers, and above all, millions of beneficiaries who depend on Medicaid. It is important to remember that continuous enrollment enacted during the pandemic was a response to three structural limitations that are part of everyday Medicaid: first, highly restrictive eligibility limits, particularly in states that do not cover low-income working-age adults; second, the lack of annual guaranteed enrollment for all beneficiaries, regardless of age or basis of eligibility; and third, a redetermination process that, despite improvements, continues to face enormous operational challenges. 

States begin Medicaid redeterminations

Posted on by • Posted in Health Insurance Coverage Adequacy, Health System, Hospital, Hospital Industry, Medicaid, Medicaid Expansion, Medicaid Redeterminations, Medicaid Unwinding, Underinsured, Uninsured • Leave a comment

https://mailchi.mp/c9e26ad7702a/the-weekly-gist-april-7-2023?e=d1e747d2d8

April 1st marked the start date of a one-year window for state Medicaid offices to reassess their beneficiary rolls, as Medicaid’s continuous enrollment policy sunsets. Since the early days of the pandemic, the federal government has boosted state Medicaid funding by 6.2 percent, in exchange for a requirement that current Medicaid beneficiaries maintain eligibility, regardless of changes to their income or other qualifiers. This policy helped grow national Medicaid enrollment to a record 90M, but a projected 15M may now lose coverage through the redetermination process. 

The Gist: After the US uninsured rate recently hit a record low, millions of Americans will now lose insurance coverage, at least temporarily.Of those no longer eligible for Medicaid, an estimated 2.7M will qualify for subsidized exchange plans, while around 400K in non-expansion states will have incomes too high for Medicaid and too low for exchange subsidies. The impact will vary in each state, both in terms of how quickly and how many Medicaid beneficiaries are disenrolled.

But in over half of states, at least one-fifth of those who will lose Medicaid coverage are projected to remain uninsured—a significant step backward in the effort to ensure universal coverage. 

Communication from Medicaid offices and exchange plan navigators will be key to preventing as many people as possible from becoming uninsured.