Harm of Delaying the Disenrollment of Medicaid Ineligibles

 

Key Takeaways

1. As a result of federal and state COVID policies, there were roughly 18 million ineligible Medicaid enrollees on the program as of April 1, 2023, at an annualized cost of more than $80 billion. Paying for ineligible enrollees pulls resources away from other public priorities and primarily benefits health insurance companies that administer Medicaid.
2. States could have begun removing ineligible enrollees in April. Some states started the redetermination process early and are efficiently processing removals of ineligible enrollees, but other states are acting slowly and will waste resources on Medicaid coverage for individuals who have moved out of state, have private insurance, have died, or earn too much income.
3. Total Medicaid savings would be $41 billion and state savings would be $12 billion if all states pursued an efficient redetermination process.
4. There are significant protections for enrollees mistakenly disenrolled, including three-month retroactive eligibility, hospital presumptive eligibility, and a robust appeals process.

Three actions

States could have taken three actions to protect limited resources for eligible Medicaid recipients or for other purposes:

1. Prioritize those most likely to be ineligible: reviewing eligibility prior to the unwinding period to initiate redeterminations for those most likely to be ineligible,
2. Move up the start date: beginning redeterminations earlier, and
3. Check eligibility in bigger batches: processing a greater number of redeterminations each month.

Since about two-thirds of Medicaid is financed by the federal government, such actions would also reduce wasteful federal spending and lower the deficit.

https://paragoninstitute.org/research-paper-page-gonshorowski-blase-kleinworth-cost-of-good-intentions-medicaid-redeterminations-20230717/