Medicaid rolls to dwindle with unwinding; successful transitions to other coverage vital

Medicaid enrollment in Arkansas exceeded 1.1 million enrollees during the pandemic due to increased need and federal restrictions on disenrollment by states during the COVID-19 public health emergency.

In return for agreeing to the restrictions, Arkansas and other states received enhanced federal funding to support expanding enrollment, ensuring continuity of health care coverage for many low-income Arkansans during a turbulent period.

The restrictions on Medicaid disenrollment were set to expire automatically at the end of the public health emergency on May 11, but a federal budget bill passed by Congress in December set a fixed date of April 1 on which states can resume disenrollment. Arkansas is one of five states beginning disenrollment this month.

This is unquestionably a massive undertaking. In fact, the Arkansas Medicaid “unwinding” plan — the operational plan required by the Centers for Medicare and Medicaid Services for states to resume disenrollment — says this will be “one of the largest and most complex efforts for state Medicaid programs since the implementation of the Affordable Care Act.”

The unwinding plan must describe the state’s timeline to complete the process (six months in Arkansas), how it will prioritize enrollee groups, and its strategies to reduce inappropriate coverage loss. Arkansas’ plan details “safeguards, new processes, and outreach efforts to protect both the taxpayers and the beneficiaries,” but it also notes anticipated challenges during the unwinding, “particularly related to workload and staffing.”

Regardless of how much planning has been done, there will be some Medicaid enrollees who experience coverage loss despite being eligible. There will also be many enrollees who are appropriately disenrolled because they are no longer eligible due to having moved out of the state, experienced an increase in income or family composition, or aged out of the program.

The unwinding plan notes that more than 400,000 enrollees no longer meet eligibility requirements or have not responded to outreach seeking information to renew coverage. Medicaid officials estimate that 15-30% of this population will be disenrolled.

That percentage could be higher if disenrollment in Arkansas tracks early patterns seen in Idaho, where nearly 60% of enrollees who were processed lost coverage on April 1. An Urban Institute analysis projects a 19% decrease in Medicaid enrollment in Arkansas among those under age 65 by June 2024, with the number of uninsured Arkansans under age 65 growing by 39,000, a 24% increase, over the same period.

The coming months will be disruptive not only for patients undergoing transitions from Medicaid but also for health care providers — who will likely experience increased costs for care provided to individuals who have lost coverage. For individuals who are disenrolled from Medicaid and are no longer eligible, they may have coverage available to them through their employer or through Healthcare.gov.

Be aware, however, that the opportunity to enroll in employer-sponsored coverage or a plan through Healthcare.gov is time-limited. Most employers offer a special enrollment period of 60 days for those who have lost coverage through Medicaid. Federal officials have announced an extended, temporary special enrollment period during the Medicaid unwinding process that is open through July 2024.

Insurers have a financial incentive to keep individuals covered and are reaching out to inform those who could lose Medicaid coverage of their options. Unfortunately, there are no Arkansas organizations among the awardees of federal funding to support navigators, who are focused on connecting communities that have historically experienced lower access to coverage and greater disparities in health outcomes. This could lead to unnecessary gaps in coverage for these populations. There are insurance agents scattered throughout the state who can assist with obtaining insurance upon disenrollment from Medicaid. They can help individuals understand plans offered through Healthcare.gov and the financial assistance available to them to purchase coverage, which can sometimes mean $0 insurance premiums for enrollees.

Ten years ago, Republican leadership in the General Assembly opted to expand Medicaid by using the private sector, which smoothed coverage transitions between Medicaid and commercial insurance, stabilized the state’s health care infrastructure, and strengthened competition in the insurance market.  During the pandemic, Medicaid was a critical safety net to ensure access to needed care. As we assess individuals for continued Medicaid eligibility, we must ensure that those who are disenrolled are successfully connected with coverage elsewhere and secure continued viability of our health care system and the competitive market upon which it depends.

Editor’s note: Craig Wilson, J.D., M.P.A., is the director of health policy for the Arkansas Center for Health Improvement, an independent, nonpartisan health policy center in Little Rock. The opinions expressed are those of the author.