Recent Medicaid/CHIP Enrollment Declines and Barriers to Maintaining Coverage
Recently there have been declines in Medicaid and CHIP enrollment, reversing a previous trend of increases following implementation of the ACA.1 Administrative data from the Centers for Medicare & Medicaid Services (CMS) show that total Medicaid and CHIP enrollment declined by 2.4 million, from 74.6 million enrollees in December 2017 to 72.2 million enrollees in June 2019.2 Some of this decline may reflect people moving to other coverage due to the improving economy, as noted by the Trump administration and some state officials.3 However, survey data show that the uninsured rate increased from 7.9% to 8.5% between 2017 and 2018, driven by decreases in Medicaid and CHIP coverage.4 Moreover, experiences in some states suggest that renewal process requirements and growing use of periodic eligibility checks may be contributing to disenrollment among people who are still eligible for coverage as well as increased churn in coverage. This brief reviews current rules and state processes related to renewal and periodic eligibility reviews and discusses potential process issues that may be contributing to Medicaid and CHIP enrollment declines.
Medicaid/CHIP Renewal Rules and State Processes
In the past, complex enrollment and renewal processes were barriers to Medicaid coverage. A person often had to take time off work to apply in person, provide substantial paper documentation of income and other eligibility criteria, and wait weeks or in some cases months for an eligibility determination. Moreover, individuals often would have to repeat these steps at renewal, which could occur every six months. As such, one major barrier to Medicaid coverage was difficulty completing these processes, including problems obtaining documentation.5
Spurred by the creation of CHIP and its goal of reducing the number of uninsured children, states began to streamline enrollment and renewal procedures to connect eligible people to coverage and keep them enrolled over time. Some states streamlined enrollment and renewal processes by eliminating in-person interviews, coordinating program rules between Medicaid and CHIP, offering multiple enrollment methods, reducing documentation requirements, and reducing the frequency of renewal.6 These actions contributed to increased enrollment and retention.7 Conversely, previous state experience also showed that reinstatement of enrollment barriers lead to significant enrollment declines.8 For example, in September 2003, Texas increased premiums, established a waiting period, and moved from a twelve- to six-month renewal period for children enrolled in the state’s CHIP program and experienced a nearly 30% decline in enrollment in the nine-month period after these changes were implemented.9
Building on the lessons learned from earlier state efforts to simplify enrollment and renewal, the ACA established streamlined technology-driven Medicaid enrollment and renewal processes for low-income adults and children across all states. The ACA processes built on previous state experience and supported the ACA’s goals of reducing the number of uninsured and keeping individuals covered over time without gaps in coverage. The ACA processes are designed to use technology to provide a consumer friendly experience and minimize administrative burdens on states.
Under the ACA, children, pregnant women, parents and expansion adults who are eligible for Medicaid or CHIP based on income have their coverage renewed no more frequently than once every 12 months using automated processes to the extent possible.10 At renewal, states must use available data from the individual’s eligibility account and other reliable data sources to determine ongoing eligibility before requesting the enrollee to complete a renewal form or provide documentation.11 If the state cannot determine that the individual remains eligible based on available information, it must then provide the individual with a pre-populated form containing the information relevant to renewal that is available to the agency and a reasonable period of time, at least 30 days, for the individual to provide the necessary information and correct any inaccuracies online, in person, by telephone or by mail.12 To reduce unnecessary applications, states must also provide a reconsideration period for individuals who lose coverage due to the renewal form or information not being submitted. If an individual’s eligibility is terminated due to lack of a renewal form or necessary information that the individual subsequently submits within 90 days after the date of termination, or a longer timeframe established by the state, the state will redetermine the individual’s eligibility without requiring a new application.13
Changes in Circumstances between Renewals
Although states must renew coverage every 12 months, an individual will be disenrolled from coverage within that 12-month period if he or she has a change in circumstances that makes him or her ineligible, such as an increase in income.14 If a state receives information from the enrollee or through another data source about a change in an individual’s circumstances that may affect eligibility, it will review the information to determine ongoing eligibility.15 States may also conduct periodic electronic data matches to identify changes in circumstances between annual renewal periods and disenroll individuals if these data checks identify changes in income or other factors that affect eligibility and the individual is unable to resolve the discrepancy within the specified timeframe, which is often limited to within 10 days from the date of the notice, in contrast to the 30 days provided to complete a renewal.
The Trump administration recently promoted use of periodic data matches between renewals as a program integrity strategy. In June 2019, CMS issued guidance to state Medicaid agencies outlining practices “to ensure that program resources are reserved for those who meet eligibility requirements”.16 One program integrity strategy the guidance points to is the use of periodic data matches to identify enrollees who may have a change in circumstances that affects eligibility.
As of January 2019, just over half of states (28) reported that they conduct data matches on a periodic basis to identify changes in circumstances between annual renewal periods.17 States vary in the frequency of these checks. Some conduct one check between annual renewals, while others may conduct quarterly or, in some cases, more frequent checks. For example, since 2014, Texas has checked income for households with children on Medicaid in the fifth, sixth, seventh, and eighth month of enrollment. These checks are timed to the child’s start date, so households with multiple children who enrolled in coverage at different times face even more frequent checks.18
Several states have recently implemented data checks or passed legislation to require more frequent data checks. In 2018, Minnesota and Tennessee implemented routine data checks to verify eligibility. In early 2018, Oklahoma passed legislation to implement quarterly eligibility checks and require enrollees to respond to notifications or requests regarding an eligibility check within ten days.19 Oklahoma also issued a rule that requires beneficiaries to update their address or risk disenrollment if mail is returned to the agency with address unknown.20
State Options to Support Continuity of Coverage
States have options to reduce coverage gaps or churn that may otherwise occur due to fluctuating incomes, which are common among low-income and hourly workers, for example, due to overtime or seasonal work. States base financial eligibility for Medicaid and CHIP on current monthly income. In determining current monthly income, states may take into account reasonably predictable income changes, such as recurring seasonal employment or a new job with a signed employment contract.21 Further, when redetermining eligibility for existing Medicaid or CHIP enrollees, states have discretion to use projected annual income for the remainder of the calendar year instead of current monthly income. Based on state plan amendments submitted to CMS to implement the ACA rules, few states indicated the use of projected annual income rather than current monthly income. In addition, for children, states can opt to provide 12-month continuous eligibility, which allows a child to remain enrolled for a full year unless the child ages out of coverage, moves out of state, voluntarily withdraws, or does not make required premium payments. As of January 2019, nearly two-thirds of the states (32) provide 12-month continuous eligibility for children in Medicaid and/or CHIP. In addition, New York and Montana have obtained waiver approval to provide 12-month continuous eligibility to adults.22
Recent Medicaid and CHIP Enrollment Declines
Recently there have been declines in Medicaid and CHIP enrollment, reversing a previous trend of increases following implementation of the ACA.23 Administrative data from the CMS show that total Medicaid and CHIP enrollment declined by 2.4 million from 74.6 million enrollees in December 2017 to 72.2 million enrollees in June 2019.24 Some of this decline may reflect people moving to other coverage due to the improving economy, as indicated by the Trump administration and some state officials.25 However, survey data show that the uninsured rate increased from 7.9% to 8.5% between 2017 and 2018, driven by decreases in Medicaid and CHIP coverage.26
Recent state experiences suggest that one factor that may be contributing to Medicaid and CHIP enrollment declines is barriers associated with maintaining coverage due to renewal processes and periodic eligibility checks in some states. Although states have implemented more streamlined and automated renewal processes under the ACA and some have taken up options to reduce churn, eligible individuals may still face barriers to maintaining coverage. For example, eligible individuals remain at risk for losing coverage if they do not receive or understand notices or forms requesting additional information to verify or confirm eligibility or do not respond to requests within required timeframes. Individuals may not understand or receive notices due to language or literacy challenges or if they have unstable housing arrangements or move frequently. Moreover, the growing use of periodic data checks by states may increase coverage gaps or “churn,” causing people to move on and off of coverage due to a temporary or small increase in income, such as overtime or seasonal work. Recent experiences from states illustrate some of these process challenges:
- In 2018, Medicaid enrollment in Missouri declined by approximately 70,000 individuals, and enrollment continued to decline by about 48,000 individuals between December 2018 and June 2019.27 In 2018, Missouri launched a new automated eligibility verification system. According to media reports, because the system was not connected to other state programs or agencies to update and verify information, many enrollees received mailed letters from the state asking them to provide information to verify and renew their coverage, and many lost coverage because those forms were not returned. State advocates and policy experts reported that many people may not have received or understood the letters. They also suggested that some of the enrollment decline may reflect the state catching up on Medicaid renewals that had been delayed for several years due to systems issues.28
- Tennessee was delayed in implementing an automated redetermination system as it worked to build a new eligibility determination system to implement the ACA.29 As it worked to build its new system, it suspended renewals as of January 2014 and continued to rely on paper-based renewals when renewals resumed in late 2015.30 From December 2017 to December 2018, total Medicaid and CHIP enrollment in the state fell from approximately 1.5 million to 1.4 million, a 9.8% reduction.31 This decline reflected the restart of renewals after the suspension period. However, media reports and advocates suggest that some of those disenrolled after renewals resumed lost coverage due to difficulties completing the paper-based renewal process.32 The state implemented an automated redetermination system in early 2019, and enrollment increased by nearly 59,000 individuals from December 2018 to June 2019.33
- In Arkansas, total Medicaid and CHIP enrollment fell from approximately 948,000 individuals in December 2016 to 841,000 in June 2019.34 Some of this enrollment decline reflects the state’s implementation of new work requirements for expansion adults, which have since been halted because the waiver was set aside by the court.35 However, enrollment began decreasing before implementation of the work requirements and media reports suggest that enrollees may also be losing coverage due to other reasons, including the state’s policy to disenroll individuals if any mail is returned as undeliverable.36 According to state officials, if mail sent to an enrollee is returned to the state and the state has not received notification of an address change, it will disenroll the individual from coverage and, in many cases, these closures are automated.37 Recent focus groups with expansion group enrollees in Arkansas revealed that some individuals (especially college students or individuals who move in and out of homelessness) did not receive notices due to address changes and some enrollees were not receiving notices at their correct address, despite having reported an address change to the state.38
- As part of a newly upgraded eligibility system, Louisiana began conducting quarterly income checks of adult Medicaid enrollees. After two rounds of income checks, the state disenrolled almost 51,000 adult enrollees and adult enrollment fell from approximately 505,000 individuals in April 2019 to 455,000 individuals in July 2019.39 Officials reported that the vast majority of people disenrolled did not respond to letters requesting verification of income.40 The upgraded system also automatically disenrolls individuals who do not complete their renewal within 30 days. In August 2019, Louisiana temporarily suspended the automatic disenrollment feature for incomplete renewals when approximately 75,000 adults were at risk of losing coverage. However, the state is continuing to operate the quarterly income checks.41 Officials have reported that implementation of the quarterly wage checks and information requests associated with annual renewals have led to increased call volume to the state agency as people seek to verify their information, and that the state does not have capacity to process the increases in call volume and information being submitted to the agency to verify information.42
- As previously noted, Texas conducts frequent income checks for households in which children are enrolled in Medicaid.43 If it finds a change that would make the child ineligible, it sends the household a letter and the family must respond within ten days to confirm eligibility. If there is no response, the system is programmed to automatically close the case without further review. Data show that the number of children churning on and off of Medicaid coverage increased after the state implemented more frequent data checks. The number of children that faced a gap in Medicaid coverage for three months or less increased from 10,000 in September 2014, before more frequent income checks began, to nearly 23,000 by June 2016.44 More recent reports suggest about 50,000 Texas children lose Medicaid each year due to lack of verification for these regular income checks.45 As such, it appears coverage losses stemming from these periodic income checks may be a factor contributing to the state’s overall recent decline in total Medicaid and CHIP enrollment, which fell by nearly 300,000 enrollees between December 2017 and June 2019.46
Building on lessons learned and previous state experiences, the ACA established streamlined enrollment and renewal processes designed to facilitate access to coverage and continuity of coverage for Medicaid and CHIP enrollees. The majority of states have implemented these new processes, which have made enrollment and renewal easier and faster for enrollees and minimized administrative burdens for states.47 In addition, some states have taken up options that help reduce churn and coverage gaps that might otherwise result from temporary changes in income, which are common among low-income and hourly workers. Despite these advancements, there remain potential barriers to maintaining coverage, and growing use of periodic eligibility checks among states may contribute to additional barriers to maintaining coverage and increases in coverage gaps or churn. Looking ahead, the Trump administration has encouraged use of periodic eligibility checks as a program integrity strategy and indicated it plans to increase requirements related to eligibility verification, monitoring of changes in enrollee circumstances, and eligibility redeterminations.48 While eligibility checks may help to ensure some people no longer eligible are disenrolled, they can also create procedural barriers to maintaining coverage for people who are eligible. Previous research and experience shows that increased requirements associated with eligibility determinations and renewals can lead to decreases in coverage among eligible people due to difficulties completing processes and providing documentation.