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For the past year, Virginia’s Medicaid program has been preparing for the big moment it now faces.
On May 1, the program could begin dropping coverage for an estimated 300,000 Virginians who rely on Medicaid for health coverage as the state re-evaluates their eligibility over the next 12 to 14 months. An additional 80,000 people could lose coverage, at least temporarily, for failing to respond to letters requiring them to apply to renew their coverage.
More than 2.2 million Virginians and their children rely on the federal-state program for the elderly, disabled and people with low incomes. But now they will have to show they are still eligible for their benefits after the end of the COVID-19 public health emergency that began more than three years ago.
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The same thing is happening across the United States and its territories, with almost 16 million Americans expected to lose Medicaid coverage as the program reassesses eligibility for 92 million people over the next year.
“This is the largest enrollment event in the history of Medicaid,” said Deborah Oswalt, executive director of the Virginia Health Care Foundation.
The nonprofit foundation is working with state and local agencies, insurance companies, free clinics and federally qualified health care centers, and other advocates to ensure that people either do not lose their health coverage or replace it with subsidized polices on the insurance marketplace.
People who lose their eligibility may be able to find affordable health coverage on the federal health insurance marketplace, which the state will soon run to provide insurance coverage with subsidies for premiums and out-of-pocket costs, based on income. The federal government also has created a special enrollment period in the marketplace for anyone who loses coverage from now until July 2024.
“We have pulled out all the stops in how we work with the states,” said Daniel Tsai, deputy administrator at the Centers for Medicare and Medicaid Services, which runs the federal program.
Virginia began reviewing eligibility of Medicaid participants last month and will continue the process over the next year. The state could begin dropping people from the program on May 1 if they no longer meet income or other eligibility requirements, which the state estimates at 14% of program participants, or about 308,000 people.
The state also is concerned about people losing their benefits because they did not receive letters about renewing eligibility or else did not respond to them. They may have moved and not forwarded their mail, may not have understood the letters because of language barriers or simply may have failed to follow through on the requirement that they apply to renew their eligibility for benefits.
Those lapses, called “administrative churn” because they are based on administrative causes rather than eligibility, could cost about 80,000 Virginians their coverage, or an additional 4% of program participants, and more than seven million people across the country.
“We need everyone engaged on this,” Tsai said at CMS.
Normally, people in the program must undergo an annual review of their eligibility, but he said, “For many folks in Medicaid, it will have been more than three years since they were required to go through eligibility determination.”
Reducing the churn
For advocates in Virginia, reducing the churn is a top priority, but it will not be easy because people in the program do not know when they will receive their renewal letters over the next 12 months, as the state staggers through the massive recertification process.
“It’s a hard message: keep an eye on the mail for the next year,” said Sara Cariano, senior health policy analyst at the Virginia Poverty Law Center. It runs a ENROLL Virginia, a statewide network that includes 24 navigators to guide people through the system.
The federal rules require people to respond in 30 days, but they also allow a 90-day grace period for reinstating people who are still eligible but did not respond in time.
“We have started to hear from some people,” Cariano said. “Folks are getting the renewal (letters) and expressing some confusion about what they are.”
Oswalt’s organization also has 21 employees across the state to help protect Medicaid eligibility or find new sources of health care coverage, but it has not received many calls yet from people in need of assistance.
“It’s a little early,” she said. “It’s just starting.”
Virginia has benefited from the long delay in ending the federal health emergency, which is the trigger for “unwinding” Medicaid eligibility that has been protected for more than three years under the terms of successive emergency relief packages approved by Congress and the White House during the pandemic.
The state has received about $2.6 billion in enhanced federal funding for Medicaid since Congress adopted the Families First Coronavirus Relief Act in March 2020. The money represents an additional 6.2% of the federal share of Medicaid costs.
In exchange, states could not drop those people from their Medicaid programs during the public health emergency. Last year, Congress adopted legislation to end the emergency, begin redetermining eligibility for benefits and phasing out the additional funding to states, which will end entirely on Dec. 31.
State officials and advocates have been preparing for the transition since last spring even though they were uncertain when it would begin. That allowed them to improve technology for automatically determining whether people remain eligible and forgoing the need for them to apply for renewal. It also has given them time to inform people of what is coming and develop options for those who will lose their eligibility.
“I think the extra time has been helpful,” Oswalt said.
The Virginia Department of Medical Assistance Services, which runs the program for the state, also is working closely with health insurance companies and advocates to help people maintain their coverage under Medicaid or find help elsewhere.
“I think they are really coming from a good place,” Oswalt said.
