Lessons Learned From Medicaid Unwinding as States Tackle Eligibility Checks

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During the COVID-19 pandemic, Congress temporarily suspended eligibility checks for Medicaid and the Children’s Health Insurance Program (CHIP), ensuring uninterrupted access to health care for millions of Americans.¹ As a result, Medicaid and CHIP enrollment surged from 71 million in February 2020 to 94 million by April 2023. However, with the pandemic emergency ending in May 2023, states resumed eligibility reviews, initiating a process termed “unwinding.” An article published in JAMA Forum offers a large-scale reevaluation with important insights into the challenges and disparities embedded in Medicaid policy.

"37% of kids were disenrolled from Medicaid over the last year," Carrie Kozlowski, OT, MBA, COO, and cofounder of Upfront Healthcare, told The American Journal of Managed Care^® in an interview in February. "And so when you combine uninsured with the already existing significant racial inequities that we're seeing, I think we are heading towards a pretty big problem in an area of our population who I feel like we're pretty obligated to make sure that we're caring for in the United States."

Lesson 1: Complex Medicaid Changes and Disenrollments

The unwinding process has proven to be a significant logistical hurdle, as states reviewed tens of millions of cases to assess eligibility, the article stated.¹ By June 2024, more than 25 million people had lost Medicaid coverage, with 69% losing it due to procedural issues—such as missing paperwork or deadlines—rather than ineligibility.³ A study in Wisconsin revealed that 37% of those disenrolled regained coverage within 6 months, suggesting many were likely eligible but were cut off due to administrative barriers.¹ Staffing shortages and outdated technology exacerbated these procedural hurdles, as some states’ systems struggled to assess eligibility accurately, resulting in the loss of coverage for people who were likely still qualified.

Lesson 2: State Variability and Impact on Medicaid Coverage

Unwinding outcomes varied widely across states, revealing how different approaches to Medicaid policy implementation affect enrollee experiences. Florida disenrolled 1.9 million people due to a swift timeline and procedural issues, sparking a lawsuit alleging the state's inadequate communication caused wrongful coverage denials. In contrast, states like Kentucky and Louisiana adopted 12-month reviews and used external data to streamline the process, helping to keep eligible individuals insured. States like New Mexico and Rhode Island also offered financial assistance to help those transitioning from Medicaid to Affordable Care Act (ACA) marketplace coverage, reducing disruptions for affected residents.

Lesson 3: Disproportionate Impact on Racial and Ethnic Minorities

The unwinding process disproportionately affected racial and ethnic minorities, as Black, Hispanic, and Native American individuals experienced higher rates of coverage loss compared with White individuals. Data from community-based health organizations indicated that these groups were about twice as likely to lose coverage due to procedural issues. During the pandemic, many of these communities had achieved gains in health care access, which were now at risk of being reversed. Because of this, the authors emphasized the need for comprehensive data collection and analysis to address racial disparities within Medicaid effectively.

Lesson 4: The Role of Federal Policy in Stabilizing Medicaid

Federal regulations can make a difference, as shown by CMS, which issued new rules in April 2024 to mitigate procedural disenrollments. These reforms aim to simplify the enrollment and renewal processes for Medicaid and CHIP, improve address verification, eliminate CHIP waiting periods, and extend streamlined processes to older adults and people with disabilities. These efforts are part of the Biden administration's push to reduce churn—frequent cycles of enrollment and disenrollment—and maintain coverage for vulnerable populations.

However, concerns about Medicaid spending have sparked political debate. For example, Senator Chuck Grassley (R-IA) raised issues regarding states erroneously retaining ineligible individuals on Medicaid, citing a Government Accountability Office report that found California had retained 175,000 ineligible enrollees. Grassley’s scrutiny reflects a broader discussion on balancing Medicaid’s inclusivity with financial accountability.

Lesson 5: The Need for Technology and Integration

Many challenges in the unwinding process might have been mitigated with better-integrated data systems, according to the authors. States that had access to streamlined eligibility data and automated procedures were more likely to prevent unnecessary disenrollments. Improved technology could also support targeted outreach to eligible enrollees at risk of procedural disenrollment and help states maintain accurate eligibility data.

The unwinding of Medicaid post–COVID-19 exhibits its complexity and the necessity for equity-focused policies. The authors stressed that effective Medicaid policy must balance inclusivity, efficiency, and accountability while emphasizing the need for accurate data, technological upgrades, and federal oversight to ensure healthcare access for millions of Americans.

References

1. Bedoya M, Sharfstein JM. Unwinding Medicaid eligibility: lessons for health policy. JAMA Health Forum. 2024;5(10):e244487. doi:10.1001/jamahealthforum.2024.4487

2. Grossi G. Carrie Kozlowski discusses the impacts of the Medicaid disenrollment crisis. AJMC. February 6, 2024. Accessed November 7, 2024. https://www.ajmc.com/view/carrie-kozlowski-discusses-the-medicaid-disenrollment-crisis

3. Bonavitacola J. Medicaid unwinding leads to both loss of, renewed insurance coverage. AJMC. September 19, 2024. Accessed November 7, 2024. https://www.ajmc.com/view/medicaid-unwinding-leads-to-both-loss-of-renewed-insurance-coverage