Missouri estimates 200,000 residents will lose Medicaid when state resumes eligibility checks
Since the federal public health emergency was declared in March 2020, states have been barred from removing enrollees from Medicaid, in exchange for enhanced federal funds. That pause on conducting eligibility redeterminations will end April 1.
The director of Missouri’s Medicaid program said he expects “about 200,000” Medicaid enrollees to lose coverage over the course of a year as a result of the state resuming annual eligibility renewals after a three-year pause.
The state’s Department of Social Services has not previously provided a public estimate of those projected to lose coverage. DSS said Wednesday it expects Medicaid enrollment numbers to “level off” approaching this July, and then “slowly ramp down” by around 200,000 people over the course of the next fiscal year, which lasts from July 2023 to July 2024.
Since the federal public health emergency was declared in March 2020, states have been barred from removing enrollees from Medicaid, in exchange for enhanced federal funds.
That pause on conducting eligibility redeterminations will end April 1. States will resume conducting eligibility checks and can again remove participants from their rolls who are deemed ineligible.
Some Missourians could lose coverage because they are no longer eligible. For example, if they now make too much money to qualify, they could be disenrolled.
Others who continue to be eligible could lose coverage because of procedural errors, such as failing to return proper paperwork. States are working under federal guidelines to limit those types of procedural disenrollments.
When the public health emergency began, in March 2020, there were just over 900,000 Missourians enrolled in Medicaid. Now, there are over 1.4 million enrolled — a result of the federal continuous coverage rules during the pandemic, as well as Missouri’s expansion of Medicaid to low-income adults in late 2021.
“I don’t think there’s any doubt that Missouri, like every other state in the country, expects to see enrollment come down once a full set of the redeterminations are done,” Todd Richardson, the director of Missouri’s Medicaid program, MO HealthNet, said at a Wednesday hearing of a Missouri House subcommittee on appropriations.
Richardson told Republican lawmakers — who raised concerns about the increasing state Medicaid budget — that those enrollment declines will reduce overall state Medicaid spending.
“As we come out of the [public health emergency], we expect to see that enrollment decline, we expect to see our budget return to more of a definable range, that’s not so much driven by that single component,” Richardson said.
The proposed Medicaid budget for next fiscal year is $15 billion, the majority of which — $9 billion — would be from federal funds. A proposed $2 billion would be from state general revenue.
Rep. Doug Richey, R-Excelsior Springs, said since in his “short lifecycle in the building” — he was elected in 2018 — he had seen the Medicaid budget grow from $10 billion to $15 billion, and the number of enrollees from under a million to 1.4 million.
“This is somewhat of a sustainability question,” Richey said, also raising concern that proposed legislation to expand postpartum Medicaid eligibility from 60 days to one year after birth would increase costs further.
“What would be a good ballpark…that would be the anticipated increase in costs for the maternal mortality effort?” Richey asked. (Richardson referred him back to the fiscal note in that legislation.)
Richardson told lawmakers rising costs in the overall Medicaid budget have largely been a result of the increased number of enrollees during the public health emergency.
The “overwhelming majority of the increase you’ve seen in the budget over the last three and a half years has been driven by enrollment,” Richardson said.
Since Missouri implemented voter-approved Medicaid eligibility to low-income adults, nearly 300,000 have enrolled from that population, as of last month.
The federal government funds 90% of the costs of expansion, and a Kaiser Family Foundation review of the literature found expansion often offsets state costs in other areas, and can save money longer-term by reducing mortality.
The other source of increased enrollment — the continuous eligibility rules which barred states from removing participants during COVID — also has been largely federally-funded, another KFF study found.
Regarding the projected participation decline, Richardson added “we do expect that decline to be meaningful…and as a result, a meaningful reduction overall in where our budget is.”
‘To lessen the burden’ of renewals
A major concern among health care advocates is that the renewal process will erroneously kick people off Medicaid who are still eligible. National studies have warned that many of those who lose Medicaid coverage during the unwinding of the continuous coverage rules could remain eligible but will be dropped off the rolls due to administrative issues.
Participants’ renewal date will, in most cases, be the anniversary month of when they originally enrolled in Medicaid, the department has said, and it has urged participants to update their contact information to receive the necessary mailed communication.
Kim Evans, director of the state’s Family Support Division, laid out for lawmakers last week initial details of the state’s plan for resuming Medicaid redeterminations and avoiding procedural disenrollment. Family Support Division handles Medicaid applications and eligibility, while MO HealthNet is responsible for services.
“We want to make every effort we can to not make this a burdensome process and create what we call churn,” Evans said last week.
“Churn” refers to the number of people who fall on and off Medicaid due to procedural issues — often because they do not return the forms, or the information is lost, which in turn increases the number of applications that staff need to process.
Missouri has been singled-out for its bureaucratic hurdles to renewal before, which Evans said her agency has made efforts to remedy.
“We’re talking about children here, we’re talking about families and, you know, adults who are disabled or elderly who need that coverage,” Evans said.
In 2019, the state came under scrutiny for significant enrollment declines. Missouri Budget Project, a liberal public policy think tank, determined that families were often kicked off Medicaid despite being eligible for coverage because of challenges with the annual renewal process, including that they did not receive the proper paperwork or submitted the paperwork only for it to be lost or not processed.
States are required to attempt to renew participants’ eligibility using existing data, called ex-parte renewals, before contacting enrollees to complete forms or documentation themselves. But Missouri has historically used this streamlined renewal process at a low rate. In January 2020, Missouri was one of seven states that processed fewer than 25% of renewals automatically.
But during the unwind of the continuous coverage provisions, the state will increasingly rely on electronic sources, Evans said.
The “whole process is new,” Evans said when Rep. John Voss, R-Cape Girardeau, asked if any elements of the renewal process were new.
Missouri will first use the United States Post Office’s national change of address database to update participants’ addresses automatically, and will then go on to attempt to electronically verify their eligibility information, such as income levels.
The earliest renewal will be for a participant with a June renewal, who will receive a letter from the state in May and, if the state requests more information, will need to respond by the end of June.
Evans explained the state’s timeline using the June renewal group as an example. In March, the department will check the addresses for that group against the federal postal data, then in April it will start the ex-parte electronic verification process. In May, the department will mail a decision letter, if the automated information was sufficient to render a decision, or send a form to request more information if it was not. If the state sends a form, the participant will need to return the information by June 30.
Evans said the Department of Social Services cannot yet estimate the portion of renewals that will be conducted automatically, using electronic verification, and thus not require participants’ response.
Previously, “we have sort of inched our way to electronic verification,” Evans said.
Those electronic sources the state plans to use for data include income data from other state programs and federal eligibility data.
Evans also listed third-party databases — which Georgetown’s Center for Children and Families wrote can “quickly go awry” — including LexisNexis. The Kansas City Star last year found LexisNexis erroneously flagging in-state Missouri Medicaid participants as out-of-state and terminating their coverage. (Evans defended their use of LexisNexis in the hearing as a “good indicator.”)
She also said the state will launch an online portal for Medicaid participants to access information about the timing of their renewals, and how far along the state is in terms of processing their information — which she hopes will be a form of “self-service” that could reduce the burden on the Medicaid call centers.
A spokesperson for the Department of Social Services said the portal is expected to launch at the end of April.
This story was originally published on the Missouri Independent.