Medicaid redeterminations begin April 1

After more than three years, the nation's continuous Medicaid enrollment policy has come to an end, setting off a pivotal redetermination period that will present unprecedented challenges for payers, health systems, and state Medicaid agencies alike.

The redetermination process threatens the nation's record low uninsured rate of 8 percent, with the most recent studies estimating that around 15 to 18 million people could lose Medicaid coverage over the next 12 to 14 months, including more than 6 million children — 3.8 million people are estimated to remain uninsured entirely. Not only are commercial payers facing a loss of members through their managed care programs, hospitals could encounter millions of newly uninsured patients.

Through the COVID-19 public health emergency, the nation has been under continuous Medicaid/CHIP enrollment since early 2020, which raised total enrollment by 20.6 million through November 2022 — a 29 percent increase in the program. In December, Congress decoupled the PHE from the continuous enrollment provision, allowing states to resume determining who is and isn't eligible for Medicaid starting April 1. 

In return for pausing disenrollments during the pandemic, states have received a 6.2 percent boost in federal funding for Medicaid, a policy that will be slowly phased out through the end of this year.

States have been able to begin the unwinding process as early as February by initiating renewals that may result in terminations on or after April 1. For states that started before April, terminations may not be effective earlier than April 1.   

According to CMS, states that will begin terminating coverage in April include Arizona, Arkansas, Idaho, New Hampshire and South Dakota. The remaining will begin terminating coverage throughout the spring and summer months.

The Urban Institute and Robert Wood Johnson Foundation predict that Utah will have the highest share of members disenrolled, and fourteen states will see more than 20 percent of their Medicaid beneficiaries lose coverage.

Major challenges are expected for states as they begin redetermining coverage, a process that is complicated in normal circumstances. Along with healthcare organizations, states are suffering from workforce pressures too, and it will be difficult for them to reprocess about 95 million enrollees, many of whom have had a change of address since the start of the pandemic. 

Beyond staffing challenges, redeterminations will be expensive for states. Over the next two fiscal years, Louisiana alone is planning to spend $195 million on determining eligibility for the roughly 2 million residents receiving benefits from its program. 

Most large payers are expecting a decrease in Medicaid members, though some predict membership to remain stable or be made up through an increase in ACA enrollment.

In anticipation of managed care losses, the nation's largest payers rolled out expanded ACA offerings last year for 2023, including UnitedHealthcare, Elevance Health, Aetna, Cigna and Centene — it's also why they're investing heavily in the transition.

On March 9, an AHIP-led coalition of payers, providers, and other healthcare organizations launched to support an industrywide transition away from continuous eligibility.

As the nation's largest private Medicaid managed care provider, Centene could be most affected. The company told investors in February that it expects to lose 2.2 million members over the following 18 months, though it expects to add back 200,000 to 300,000 members through its exchange products. 

"In general, I feel like the industry is aligning and organizing around an approach that will minimize or seek to minimize member abrasion in the process and are allowing us to run alongside our state partners, all of which is positive from our perspective," Centene CEO Sarah London said in February. 

Earlier this year, CMS released detailed guidance on how states can work with payers to prepare for the return to regular eligibility and enrollment operations. 

"Internally, and also through partnerships with the states and regulators, we want communication out there to our existing Medicaid members and to those who could get redetermined off," Marcus Robinson, UnitedHealthcare's president of markets for individual and family plans, told Becker's in November. "We're letting the states and everyone involved know that we want to help in the process, whether it's folks coming back on employer plan designs, aging into Medicare, or the individual family plan — it's making sure that people remain covered."

Elevance Health's president of commercial business, Morgan Kendrick, described the company's redetermination strategy as a "catcher's mitt" last fall.

"There's business that stays on the Medicaid side, there's business that's going to move to the commercial side, be it group or individual," she said. "We've done a really nice job in expanding our footprint to cover roughly 95 percent of the population of the geographies we serve from a commercial individual ACA perspective.

CMS has also opened an ACA special enrollment period starting March 31 for those losing Medicaid coverage, which will run through July 31, 2024.

In addition, the agency said in August it is investing close to $100 million to help minority individuals and those in underserved communities find and enroll in ACA plans, Medicaid and CHIP.

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