Another Safety Net's Unwinding

The "unwinding" of Medicaid and the broader challenges it highlights

When talking about US federal stimulus bills passed in the pandemic era, most of the conversation focuses on the CARES Act, the 2021 budget law, and the American Rescue Plan (ARP). These three bills sent out stimulus checks to millions of Americans, and they were by far the largest spending packages.

However, there are a handful of other spending laws that accompanied these three stimulus packages, and underneath the layers of them is a provision that led to historically low rates of Americans without health insurance. That’s about to end, with millions of Americans at risk of losing coverage in the coming months.

Let’s dive into the unwinding of Medicaid across the country and what lessons it offers for the delivery of health policy, addressing of social determinants of health, and structural disadvantages faced by the uninsured.

The Families First Coronavirus Response Act

By March of 2020, cases numbers for COVID-19 were on the rise across the world, and Congress was anxious to provide the funding necessary for the Trump administration to ward off the pandemic. In late February, the administration had asked for $2.5 billion, which many lawmakers found to be too low of a number to adequately address the crisis. The first legislative package signed into law on March 6, the Coronavirus Preparedness and Response Supplemental Appropriations Act, provided $8.3 billion in funding to fight the outbreak abroad, prepare state and federal agencies, and begin investments into private sector vaccines.

By March 12, Speaker of the House Nancy Pelosi and Treasury Secretary Steve Mnuchin had already started negotiations on what would become the Families First Coronavirus Response Act (FFCRA), which increased funding to the food stamps program, paid for free COVID-19 tests, and covered the cost of two weeks of paid leave for workers in affected industries. The bill became law on March 18.

In late January 2020, the Trump administration had already started a public health emergency for COVID-19. The emergency allowed the Department of Health and Human Services (HHS) tap extra sources of funding, but with the language of the FFCRA, Congress also passed a provision requiring state Medicaid programs to keep members enrolled until the end of the public health emergency in something called the Medicaid Maintenance of Eligibility (MOE) requirement.

Typically, Medicaid members must re-enroll each year, and this serves as an opportunity that states use to make sure it only covers those eligible for the program. Although Medicaid is intended to cover low-income Americans, each state has its own nuances to eligibility requirements that give them great control over how many Americans are on these programs.

Medicaid, although operated by the states, is funded jointly by the federal and state government. To offset the cost of keeping people continuously enrolled in Medicaid, even if they did not specifically re-enroll or if they became ineligible according to state law, the FFCRA requirement also increased the federal government’s sharing of Medicaid program expenses by 6% of a state’s total Medicaid program cost.

It has been noted that this increase in federal contribution to the cost of Medicaid programs by a share of 6.2% more than offset the cost of more enrollees.

The continuation of enrollment combined with other stimulus packages which offered extra support for states to expand their Medicaid programs led to a record low percentage of Americans without health insurance in 2022.

However, in 2022, a spending bill named the Consolidated Appropriations Act, 2023 modified the MOE by setting an end date for the requirement on March 31, 2023, instead of at the end of May when the public health emergency for COVID-19 is slated to end.

Dropping Members

Over the next 12-14 months, dozens of states will be conducting widespread checks on Medicaid members’ eligibility and require millions to re-enroll for Medicaid to keep it. This entails mailing out millions of informational documents which many may not be able to access if they moved to new addresses or lost their housing.

A lack of awareness of the unwinding of Medicaid is likely to spell trouble for millions on the program, and getting the word out on Medicaid unwinding is not so simple. Once again, if someone does not receive mail notifications at the correct address or if there’s an inability of someone to take the time to reach back out to the state to re-enroll or verify eligibility, that can be grounds for losing health coverage.

Low-income Americans struggling to make ends meet juggling work, family, and education are likely to slip through these large cracks. Those with limited fluency in English are also likely to miss out on catching critical information, and health centers and community organizations that work with low-income Americans across the country are perpetually under financial and manpower constraints that can limit the extent of their outreach to keep Americans from losing coverage.

It’s also likely that states with politicians bent on cutting the cost of Medicaid or those which have not expanded Medicaid to the standards of the Affordable Care Act (ACA) will not invest as much in administrative staff and state/local partnerships to conduct outreach. If there are no resources to verify eligibility, the blame for millions losing Medicaid suddenly becomes harder to tie directly to politicians responsible for underfunding crucial bodies.

The Secret Life of Administrators

The administrative nightmares of the Medicaid unwinding and its associated monstrous task of verifying eligibility for millions of Americans highlights a key challenge that anyone concerned with health equity and policy must deeply consider.

When someone moves or becomes homeless, reconciling a record of that information with Medicaid enrollment data would be quite useful, but the resources are simply not present to coordinate these local, state, and federal agencies to quickly exchange such data. Many government technology services are stuck in legacy software with insufficient funds available to upgrade these systems to enable such integrated communication between agencies.

The primary method of notifying Americans of the need to re-enroll for Medicaid is mail, and there is simply not enough manpower to call, email, or go in-person to each person who may need to be notified. Partnerships with local health centers and community-based organizations offer an opportunity to expand the scope of advertising, but there’s also the challenge of health literacy.

Healthcare coverage is notoriously complex, and when the average American is at a middle-school reading level, it’s no wonder that filling out paperwork to re-enroll is a challenge in and of itself. For many, this requires access to a social worker, and even then, there’s no guarantee that people can find time to make such appointments or even grasp the true financial weight of having no insurance. After all, health insurance premiums seem like an unnecessary expense that can make or break someone living paycheck-to-paycheck.