Stopping the churn: Why some states want to guarantee Medicaid coverage

Before the start of the Covid-19 public health emergency in 2020, millions of children were on and off Medicaid each year — an indication that many were losing coverage because of administrative problems, rather than because their family incomes had risen and made them ineligible.

Spurred by the lessons of the pandemic era, several states are rethinking their enrollment policies for the youngest Medicaid members. Oregon is taking the lead after receiving federal approval to implement a new continuous-enrollment policy.

In 2023, when the public health emergency is expected to end, Oregon will become the first state to allow Medicaid-eligible children to enroll at birth and remain enrolled until age 6, regardless of changes in family income and without reapplying. .

“It’s really a no-brainer when it comes to supporting kids,” said Jennifer Wagley, executive director of Our Children Oregon, an advocacy group. He said insuring children — especially at the youngest ages, when their bodies and minds are still developing — would ensure they don’t miss out on important checkups and care because of gaps in coverage.

Three other states are set to implement similar policies for their Medicaid plans, which provide health coverage to low-income people and are funded by the state and federal governments. Washington state asked the Biden administration in July for permission to offer continuous coverage to children up to age 6, and a decision is expected in the next few weeks. California lawmakers approved a proposal to keep children covered until age 5, pending federal approval, starting in 2025. And New Mexico has sought public comment on its plan to enroll children until age 6 and is expected to receive federal approval later this year.

Medicaid rolls hit record highs nationally after the federal government barred states from dropping members during public health emergencies unless they die or move out of state. The rule helped push the nation’s uninsured rate to record lows.

Of the nearly 90 million people on Medicaid and the Children’s Health Insurance Program — a federal-state program that covers children in families with incomes above Medicaid eligibility — about 41 million are children.

Joanne Alker, executive director of Georgetown University’s Center for Children and Families, called states’ move to longer periods of continuous coverage for children a “silver lining to the epidemic for children.”

He noted that from the fourth quarter of 2020 to the first quarter of 2022, the share of uninsured children in the US fell from 6.7% to 3.7%, largely due to emergency rules that prevented states from dropping Medicaid enrollees.

“States need to do a lot of publicity about this new policy so that every child leaves the hospital with health insurance and parents don’t have to worry about coverage until the child goes to kindergarten,” he said.

If the public health emergency ends next year, about 5.3 million children could lose Medicaid coverage, according to a federal analysis released in August. About 1.4 million of them will be removed from the rolls because they are no longer eligible, but about 4 million eligible children will lose coverage for administrative reasons, such as failing to submit paperwork on time.

Because Medicaid family income eligibility thresholds are generally higher for children than for adults, children are less likely to lose coverage due to small changes in income. But children can lose their eligibility if parents fail to renew coverage each year or don’t respond when a state asks for information to confirm that a family’s income remains low enough to qualify.

Medicaid enrollees are generally required to report any changes in household income or other criteria that may affect their eligibility during the year, and states must act on these changes. This is challenging for Medicaid beneficiaries and state agencies because people’s incomes often fluctuate. As a result, enrollees may lose coverage, be forced to switch between Medicaid and subsidized marketplace coverage on the Affordable Care Act insurance exchanges, or experience coverage gaps if completing paperwork proves difficult.

To address that problem, about half of states give children one year of continuous Medicaid eligibility regardless of changes in their family’s income. This group includes both Republican- and Democrat-controlled states, including some states — such as Alabama and Mississippi — that did not expand Medicaid under the ACA.

Before moving to continuous coverage for children up to age 6, Oregon offered 12 months of continuous eligibility for children. Even so, state Medicaid officials estimated that in 2019, before the pandemic began, more than 70,000 children under the age of 6 — one-third of those enrolled — churned in and out of Medicaid. About 29,000 of those children had coverage gaps that exceeded six months, state officials told KHN.

Oregon officials estimate that after four years, the new enrollment policy will benefit more than 51,000 children in 2027, at a cost of $177 million.

“The public health emergency clearly demonstrated the value of having continuous health insurance, especially for populations that experience health disparities and have historical barriers to access to health care,” said Elizabeth Ghurst, spokeswoman for the Oregon Health Authority, which oversees the state. Medicaid program.

The six-year guarantee would also reduce administrative costs for the state, as it would not have to process some applications each year. And officials hope it will reduce the program’s medical costs, because children on Medicaid will have access to preventive and primary care services that can reduce medical needs associated with delays in seeking care.

Oregon offers Medicaid and CHIP coverage to children in families with incomes up to 300% of the federal poverty level, which is $83,250 for a family of four.

Lori Coyner, Oregon’s senior Medicaid policy adviser, said the change would reduce health disparities because it would help children of color maintain coverage and access to care.

In addition to keeping children on Medicaid longer, Oregon won federal approval in October that gives children 6 and older and adults two years of continuous eligibility regardless of changes in their family’s income.

Nationally, KFF estimates that about 11% of children enrolled in Medicaid lost their coverage for at least one day in 2019 before regaining it. Washington state also reported 11%.

In California, where a continuous-coverage policy is being considered, Medicaid officials estimate that of about 1.2 million children who are covered under age 5, about 64,000 — or 6% — were dropped from the rolls and then re-enrolled in the same year. was done

Mike Odeh, senior director of health for California advocacy group Children Now, believes the state’s churn estimate is too low. He estimates that 89,000 children are affected annually. The California Legislature included a continuing eligibility provision in the budget it approved in June. Starting in 2025, California will cover children on Medicaid until age 5 as long as the state can afford it.

The California Medicaid Agency estimates the policy change will cost $39 million in 2025, assuming January implementation, and $68 million for the 2025-26 fiscal year. The state is still weighing when to seek federal approval.

Odeh hopes the state will move forward soon. “We’d rather see the state pay for childcare than pay for paperwork,” he said. Having to re-enroll every year, he added, can be a barrier for low-income families. “We want them healthy and ready for school,” Odeh said.

Medicaid officials in Washington state said they have considered giving children continuous eligibility for years. “Families on Medicaid are really busy, and the last thing they can think about is renewing their coverage — and so it falls to the bottom of their priority list,” said Amy Dobbins, division manager of the Office of Medicaid Eligibility and Policy.

He said the Covid public health emergency, during which more children received coverage and access to health services, only strengthened the case for continued eligibility.

Diane Hasselman, interim executive director of the National Association of Medicaid Directors, predicted that some states may be wary of following Oregon’s lead. “State lawmakers may also be concerned about increasing Medicaid program enrollment, especially at a time when enrollment has already grown significantly,” he said. Also, lawmakers may be concerned with other insurance options, such as expanding coverage to people from the parent’s workplace, he said.

While some states are happy to keep children on Medicaid until age 6, Georgetown’s Alker stressed that Oregon’s new policy will take effect — at the end of a public health emergency — as millions of children lose coverage.

“States that are unresponsive to children’s needs when a public health emergency ends will likely see a large increase in uninsured children,” Alkar said. “So there are very different outcomes ahead.”

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