Thousands on Michigan Medicaid will keep coverage for at least another month

• Michigan’s Medicaid programs now cover an unprecedented 3 million residents.
• The programs grew during the pandemic because of a federal rule, first passed by the Trump administration, that prevented people from losing coverage and halted the “churn” that kept Medicaid enrollment stable.
• Now the state is starting the process of paring back.

Tens of thousands of Michiganders will get at least one more month of health care coverage through the state’s safety-net insurance, Medicaid, and more than 62,000 others have been “passively” enrolled by the state — meaning they haven’t had to file specific paperwork to stay enrolled.

But just how many people will lose coverage in the coming weeks as the state reviews eligibility for each beneficiary is still unclear. The Michigan Department of Health and Human Services is reviewing eligibility requirements now of 217,000 people currently covered by Medicaid. It’s the first batch of the more than 3 million people whose qualifications will be reevaluated from now through May 2024.

Anecdotally, staff at local MDHHS offices are answering questions from current beneficiaries responding to the state’s request for income and other information that will help determine their continued eligibility, said Meghan Groen, who heads the state's Medicaid program.

Related:

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• Medicaid review could drop 400,000 Michigan residents from coverage

That means, she said, that the state’s efforts to reach those beneficiaries by mail, email, text and social media are working to an extent.

“Our local offices are hearing from people (and) we are able to help people through that process” of reenrollment, Groen said. “That’s something we’re really feeling good about.”

Since 2020, a special COVID-era rule has allowed people to stay on Michigan’s Medicaid programs, including the MI Child and Healthy Michigan Plan, without proof that they’re eligible. 

The Families First Coronavirus Response Act, offered a 6.5 percent increase in matching funds to states that agreed to stop bumping people out of Medicaid coverage for the duration of the public health emergency. For more than two years, that action essentially halted the churn of people in and out of Medicaid programs and that kept enrollment fairly stable over time. 

Those 775,000 additional beneficiaries expanded the programs to cover more than 3 million MIchiganders, the largest enrollment ever, at a cost of more than $50 million a month, according to a December analysis by the Michigan House Fiscal Agency.

But some of those beneficiaries are no longer eligible for Medicaid because their income or family size has changed or a new employer now offers health coverage. 

Now the clock is winding down, and beneficiaries must prove they’re still eligible. But in one recent survey, six in 10 adults on Medicaid didn’t realize they faced such a deadline. Those who lose coverage could face surprise bills the next time they go in for a check-up, try to fill a prescription or go to an emergency room.

Medicaid is mostly paid for by federal taxes, however. And the special federal rule that halted the regular churn in Medicaid programs ended earlier this year, meaning states were forced to restart the regular process of eligibility checks, which in turn, would pare back their Medicaid enrollment.

That process began In March. Some states decided to do a more speedy review; Michigan and at least 32 other states will take a full year. In March, it sent out its first batch of letters covering more than 217,000 beneficiaries, alerting the beneficiaries that their coverage would end if they didn’t complete  paperwork to show they’re still eligible.

MDHHS staff were able to enroll just over 62,000 of those beneficiaries, meaning the state could verify their qualifications through other data sources, Bob Wheaton, a department spokesman told Bridge in an email.

Then earlier this month, the U.S. Centers for Medicaid & Medicare Services relaxed some of the rules for disenrollment, including allowing states to take extra time to match beneficiaries with other data sources, such as the income information supplied through the federal Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families programs (SNAP and TANF).

The delay also gives local health clinics and health care advocates time to nudge beneficiaries to file paperwork to keep their Medicaid.

Meanwhile, staff at local health centers, hospitals and others are stepping up efforts to make sure enrollees — some of whom might be homeless, have moved addresses, or may not be able to understand the state’s notification letters — don’t lose coverage because of paperwork snafus.

About a half-dozen people each day request help from the staff at the Community Health and Social Services Center, CHASS, in southwest Detroit, said CEO Dr. Felix Valbuena.

There, staff trained in the Medicaid enrollment process now rotate next to the reception desk, making sure each patient has filed their most up-to-date paperwork with the state. 

“For the vast majority, it’s just paperwork (that they need to file) rather than they’re ineligible,” Valbuena said.

Already, at least 1.5 million people in 25 states and the District of Columbia had been disenrolled as of Monday, according to KFF, a San Francisco based health care research nonprofit tracking states’ efforts to review eligibility.

KFF noted that states varied on how “aggressively” they disenrolled beneficiaries, based on an analysis of “procedural disenrollments” in about two dozen states.

Such disenrollments can happen because the state has “outdated contact information or because the enrollee does not understand or otherwise does not complete renewal packets within a specific timeframe,” according to KFF.

Of the people disenrolled in South Carolina, for example, 95 percent were procedural disenrollments; while in Alaska, 15 percent were due to procedurally disenrollment.

It’s not clear just how many Michiganders stand to lose coverage. 

The state doesn’t have data yet on how many people have turned in eligibility paperwork, according to Groen. And now the extra month in Michigan offers a bit of cushion for beneficiaries who might be caught off guard by the changes.

“I want people in that first month to have the same awareness and knowledge of what (paperwork) they need to return as anybody else going through that process,” Groen said.

But delaying the deadline also comes at a still unknown cost — likely tens of millions of dollars that cover residents no longer eligible, given the House Fiscal Agency estimate from December.

“You are spending money that could be spent in other ways — in a school, on roads, or in small businesses,” said Josh Archambault, a visiting fellow with the free-market Mackinac Center for Public Policy. Archambault has written that spending money on people no longer eligible for Medicaid has gone “unchecked for three years.”

Those funds — actually the money spent to keep people on Medicaid month to month — “line the pockets” of insurers that provide managed-care Medicaid coverage, he told Bridge on Monday. The state, after all, continues to make regular payments for those beneficiaries, even if they’re no longer eligible for coverage because they’ve got a higher-paying job, have obtained employer-sponsored insurance, or moved out of state, for example.

“Every delay is lining the pockets of a managed care company,” he said. “I’m not saying that’s their motive, but that’s the reality.”

Dominick Pallone, executive of the insurance industry group, Michigan Association of Health Plans, called that criticism "hyperbole," saying the efforts at redetermination are about making sure people don't lose coverage.

Pallone said the average profit in Medicaid health plans is 2 to 3 percent and state contracts prohibit any "lining of the pockets." Michigan insurers were forced to return hundreds of millions of tax dollars during COVID for that reason, according to Pallone.

"Our focus, and certainly the focus on the state, is to make sure the people on Medicaid that rightly belong on Medicaid can continue to stay on the program," he said. A careful redetermination process allows the state and insurers to help Michiganders who will lose Medicaid coverage find alternative, low-cost plans on the federal marketplace or through Medicare, for example.

"We want to keep people insured," Pallone said. "That's our focus -- that people can maintain some benefit."