More frequent Medicaid eligibility requirements will terminate health coverage for millions of eligible children and families.
Congress is rushing to target Medicaid for $880 billion in cuts over the next 10 years to fund tax cuts for Elon Musk and other wealthy CEOs. One way they plan to pay for these cuts is by requiring more frequent eligibility checks. These proposals will:
- Cause millions of eligible enrollees to lose their health care coverage
- Add excessive red tape for enrollees and states
- Increase state workload and the likelihood of renewal mistakes
Eligible Californians will lose their health care coverage
Today, most Medicaid enrollees must complete their renewals annually, every 12 months, but Republicans in Congress are proposing to require individuals to fully renew their eligibility every six months. This will place an undue burden on low-income individuals and families to keep their health coverage. There are a variety of reasons why people lose coverage without being determined ineligible—sometimes the mail doesn’t reach them, the renewal notice is confusing, they are unable to get through call centers due to long waits, or their submitted paperwork is lost due to staffing shortages. The overwhelming majority of states reported Medicaid disenrollments due to procedural or ‘paperwork’ reasons, with the national average being 71% of people disenrolled through no fault of their own when they are likely still eligible.(1)
More frequent renewals are unnecessary
People getting health insurance through Medicaid already have a duty to report any change in circumstance that might impact eligibility, such as change in income, family size, or place of residence. Most states require the change to be reported within 10 to 30 days. Some states already receive monthly, and even daily, electronic data for deaths, births, out-of-state duplication, and other significant factors that impact eligibility. When a change of circumstance is triggered, Medicaid conducts a renewal on a case-by-case basis. Because of these longstanding eligibility safeguards, more frequent renewals are simply unnecessary.
More red tape overloads county workers
If Congress’s proposal to double the frequency of renewals takes effect, county workload will double—placing untenable stressors on staff. When staff cannot process received renewals, Medi-Cal automatically terminates health coverage (procedural terminations). The National Association of Medicaid Directors found that the average Medicaid agency vacancy rate is 17%, although some states are as high as 30 to 40%.(2) California county Medi-Cal offices report similarly high vacancy rates. Currently counties must process anywhere between 700,000 and over 1,000,000 Medi-Cal renewals each month. Requiring more frequent renewals for certain people would increase that amount by 425,000 each month, threatening to break county operations and grossly increase administrative costs.
More frequent renewals cost states money and harm people’s health
Procedural terminations result in eligible people cycling on and off coverage, an issue commonly referred to as “churning.” Kaiser Family Foundation found that 10% of full-benefit Medicaid enrollees have a gap in coverage of less than a year, with churn rates varying substantially by state, ranging from less than 5% in some states to more than 15% in others. Research indicates that enrollees who experience gaps in coverage are more likely to report difficulties getting medical care and are more likely to end up in the hospital with a preventable condition. Staff will have less time to perform other important eligibility tasks, process new applications, and answer telephone calls. The number of inadvertent errors due to the doubled renewal rate will likely increase as well. In addition, increased churn correlates with increased administrative costs from counties sending out far more renewal packets. This is the opposite of streamlining county staff’s use of time, because when churn occurs, counties must receive and process more renewal packets and new applications from the same people. A 2015 study estimated that the administrative cost of a single person disenrolling and reenrolling in Medicaid is $400–$600 based on 2015 numbers.(3)
More frequent renewals drive up health care costs
According to a 2021 HHS report, one study found adults with 12 full months of Medicaid coverage in 2012 had lower average cost than those with six months or only three months of coverage.(4) The higher health care costs are the result of people who lost Medicaid coverage delaying or forgoing care, which often leads to more expensive medical care down the road, especially for those who have chronic conditions. For older adults with Medicare, they will experience sudden financial insecurity as Medi-Cal provides financial assistance covering Medicare premiums, deductibles, and co-insurance. For those who rely on Medicaid personal care services, the loss of Medicaid, even short-term, will be acutely felt by people who need help with everyday activities such as cooking or bathing.
More frequent renewals target children and Latine families
A federal analysis on the PHE unwinding of the federal continuous coverage protection found that children and Latine populations losing Medicaid health insurance are most likely to still qualify despite procedural terminations. 64% of all Latine enrollees losing coverage are projected to be disenrolled due to procedural reasons. A CPEHN analysis found that:
Latine Medi-Cal members and members who speak Spanish as their primary language were most likely to be discontinued from coverage, the overwhelming majority of disenrollments due to “procedural” reasons.(5)
In other words, Medicaid health insurance terminations for Latine enrollees are unnecessary because they are more likely
to remain eligible.
Challenges of current renewal process will be exacerbated
A mother in California whose son was diagnosed with obsessive-compulsive disorder and depression was denied therapy and medications after being procedurally disenrolled from Medicaid (known as Medi-Cal in California) even though the mother had submitted renewal information through the state’s public benefit website. In another example, a woman went to the pharmacy to pick up her medicine but was told that it was unavailable and that she had been disenrolled from Medi-Cal, even though she submitted her renewal packet and had no change in income.
More frequent renewals will terminate health care for people who can lest afford it.
Endnotes
- Tolbert, Jennifer, Robin Rudowitz and Patrick Drake. “Understanding Medicaid Procedural Disenrollment Rates.” KFF. September 7, 2023.
- Cutler-Tran, Dawn. “Medicaid Agency Workforce Challenges and Unwinding.” National Association of Medicaid Directors. March 3, 2023.
- Swartz, Katherine, Pamela Farley Short, Deborah Roempke Graefe, and Namrata Uberoi. “Reducing Medicaid Churning: Extending Eligibility For Twelve Months Or To End Of Calendar Year Is Most Effective.” Health Affairs 34, no. 7 (July 2015): 1180–87.
- Sugar, Sarah, Christie Peters, Nancy De Lew, and Benjamin D. Sommers. “Medicaid Churning and Continuity of Care: Evidence and Policy Considerations Before and After the COVID-19 Pandemic (Issue Brief No. HP-2021-10).” Issue Brief. ASPE Office of Health Policy, April 12, 2021.
- California Pan Ethnic Health Network. “California’s Implementation of Federal Flexibilities During the Medicaid Unwinding Reduce Racial, Ethnic, and Linguistic Disparities in Medi-Cal Redeterminations Rates,” October 25, 2024.
