December 4, 2023

Health Insurance

Follow Your Health Insurance

Florida is trying to kneecap Medicaid. Blue states can do something.

America remains the only well-off democratic country without universal access to health insurance. The 2010 Affordable Care Act, informally known as Obamacare, substantially increased access by offering Medicaid coverage to millions of low-income people who were previously denied coverage.

Progressive efforts in recent years to grow the effects of the ACA—such as by adding a public option—have failed to gain traction in Congress. During the pandemic, however, the government made a seemingly minor bureaucratic change that had a radical impact on insurance rolls. Typically, people have to re-enroll in Medicaid every year to show they’re still eligible. The federal government suspended this renewal process at the onset of the pandemic, meaning people would not be disenrolled for failing to complete the required paperwork.

The result? Simply not requiring Medicaid recipients to complete an annual renewal process saw a greater increase in health insurance coverage than Obamacare had over an equivalent time frame.

The lesson? Onerous administrative procedures are a key reason why even eligible Medicaid recipients lose coverage. Finding ways to reduce the administrative burdens in those processes—or better yet, to automate them so eligible clients never have to complete forms just to keep health care coverage—would be a major step toward ensuring people can access health care.

This lesson is especially important because an estimated 7 million eligible Medicaid clients are about to lose their coverage. Now that the pandemic is over, as well as the pandemic-era federal rules preventing automatic disenrollment, states are reinstating those renewal procedures. More than 1.6 million people have already lost their Medicaid coverage, and most states haven’t even begun these reviews. This is a slow-moving and largely preventable administrative disaster in the making.

Eligible beneficiaries are once again encountering unwieldy bureaucratic obstacles to keeping their coverage. Some states have done little to prepare for the great unwinding, despite persistent warnings. Florida has dropped more than 300,000 residents from Medicaid since April. Nationally, 71 percent of disenrollments are occurring due to “procedural reasons,” like missing paperwork, or simply because notifications were sent to an old address so people didn’t realize they needed to recertify.

Why didn’t the Biden administration simply continue to extend the public health emergency rules? It did, multiple times, but the December 2022 omnibus budget deal permanently ended it. Without legislation, the administration cannot unilaterally do away with Medicaid renewal requirements. Instead, it has been trying to persuade states to do what they can to stem the losses, offering flexibilities like allowing states to spread out renewals over 12 months, or using administrative data to determine eligibility.

Red states were quick to begin disenrollment once the public health emergency officially ended. This fits with a long-standing pattern of Republicans strategically using administrative burdens as a form of “policymaking by other means” in health and welfare programs. For example, Florida is just one of two states, along with Montana, that has declined to use any of the flexibilities offered by the Biden administration to minimize the effect of the great unwinding. But blue states, like Maryland and Connecticut, are also experiencing high rates of disenrollment for procedural reasons. Political motivations aren’t the sole source of burdens. A lack of capacity, innovation, and technology also matters, and importantly, can be fixed.

Indeed, there is some good news from the front lines. Some states are implementing practices to reduce the risk of catastrophic coverage loss. As researchers on administrative burdens, we are evaluating efforts by the civic tech nonprofit Code for America and the state of Minnesota to expand the pool of Medicaid beneficiaries who can be automatically renewed. Automatic renewal, referred to as “ex parte renewal” in the context of Medicaid, means that clients avoid needless paperwork and maintain coverage. And state officials spend less time, and money, on administration. Code for America and Minnesota are applying the lesson of the pandemic: Not disenrolling eligible recipients matters enormously to access.

Processes of automatic renewal rest on a fairly simple premise: When the state has the data to verify that a client is eligible for a program, it should go ahead and renew them, rather than ask them to repeatedly provide that data.

In some policy areas, states have become more willing to apply this principle, such as in automatic voter registration, or using data to register people in other safety net programs once they have demonstrated eligibility for one program. But it is not used as effectively and aggressively as it should be as a standard policy tool for a variety of reasons including outdated views around privacy concerns in this area.

A more pressing challenge is the administrative and technological capacity required to move to a new approach. Minnesota, like many states, uses ex parte renewals for some clients whose eligibility is based on income, ultimately processing 25–50 percent of renewals this way. But to help manage the great unwinding, they recently expanded to another population: the aged, blind, or disabled. This required retraining employees, developing new approaches to compiling and presenting eligibility data to employees, and automating some of the most repetitive parts of their job, such as notices sent to employees.

About 70 percent of the state’s 200,000 aged, blind, and disabled qualify for a new ex parte renewal process, and of those, preliminary analysis shows 85 percent will be auto-renewed. This means that more than half of the most vulnerable Medicaid beneficiaries will be spared an onerous administrative process, as well as the substantial risk of losing coverage. Assuming that ex parte renewal protects 10 percent of people who would have been rejected for procedural reasons, this results in an extra $636 million in benefits.

Tools like ex parte renewals offer a win–win when it comes to reducing burdens. They reduce administrative barriers for clients who no longer have to complete confusing forms and provide complex documentation. They also help caseworkers, who no longer have to chase down missing documentation or deal with renewals when clients realize they have lost their coverage, which generates an estimated $500 per case in administrative costs.

It also saves time, a resource in short supply amid the barrage of renewals. In Minnesota, state employees spend an average of 70 minutes on a standard Medicaid renewal process, but ex parte renewals took a fraction of the time—about 10 minutes per beneficiary as caseworkers learned the new system. This translated to about $4.6 million annually in the value of caseworker time saved, allowing the state to direct that time to more complex renewal cases.

For state leaders, more aggressively employing ex parte renewals should be a no brainer. The Biden administration has been pushing such tools, and surveys of the public show that almost 7 out of 10 people support using automatic renewals to maintain coverage. The end of the public health emergency offers a moment when state governments can re-imagine how they manage their relationships with citizens. Expanding the use of ex parte renewals would reduce the expensive “churn” of recipients cycling off and on programs, as well as the time both they and state officials spend on paperwork. It would show the public that their government is ready to innovate to help them, rather than willing to settle for outdated processes that drown citizens in paperwork.