State Medicaid Officials Project Enrollment Nosedive Next Year Amid Unwinding

State Medicaid officials are predicting steep enrollment declines and rising state spending on the safety net insurance program as pandemic-era policies expire.

Medicaid enrollment increased by more than 23 million people during the COVID-19 pandemic’s continuous enrollment period, when states couldn’t remove members from Medicaid without losing more generous federal funding. States could resume checking Medicaid beneficiaries’ eligibility as early as April, in a process called redeterminations.

Medicaid enrollment growth slowed in the 2023 fiscal year as redeterminations kicked off — and state Medicaid officials are bracing themselves for a further enrollment nosedive in the 2024 fiscal year as the process continues, according to a new KFF survey of 48 states and Washington, D.C.

States are forecasting an 8.6% decline in national enrollment in the 2024 fiscal year — the largest year-over-year drop since 1998, the earliest year of the KFF’s data.

“These estimates reflect a dramatic year-over-year decline in program enrollment after reaching record highs during the continuous enrollment period,” said Liz Williams, a senior policy analyst with KFF, during a Tuesday webinar on the survey’s findings.

Medicaid enrollment expected to plummet amid redeterminations

Annual percentage change in Medicaid enrollment FY 1998 – FY 2023, FY 2024 projected

Researchers stressed estimates are still very much up in the air, given ongoing uncertainty around the redeterminations process. But the new estimate, unlike prior forecasts of Medicaid losses, may be more accurate, because it also takes into account new enrollments and reenrollments.

The Biden administration has estimated that up to 15 million Americans could lose Medicaid coverage due to the resumed eligibility checks.

Yet recent figures from consultancy Avalere project a more drastic impact — finding up to 30 million people could be purged from Medicaid rolls by the end of redeterminations. Some will be due to state errors in reviewing eligibility, causing beneficiaries to lose coverage for things like incorrect paperwork.

Almost three-fourths of the 10 million disenrollments to date have been procedural, according to KFF.

Federal regulators have taken actions to curb procedural disenrollments amid criticism the government should be doing more to help low-income Americans who still qualify for Medicaid retain their coverage.

Earlier this year, the Biden administration briefly halted redeterminations in over a dozen states, and has also required states to reinstate coverage for individuals wrongly removed due to an administrative glitch.

In recent third-quarter earnings calls, CenteneMolina and Elevance — all of which contract with states to manage the care of Medicaid beneficiaries — said they’re seeing the rate of reconnects accelerate compared to earlier this year.

Medicaid spend

The Medicaid program accounts for a significant portion of state expenditures. The program made up 27% of total state spending for all budget items in 2021, according to data from the National Association of State Budget Officers (NASBO) cited by the KFF.

Medicaid is also a major source of funding for states, and the federal government took on even more of the program’s financial burden during the pandemic.

In exchange for not removing Medicaid members from rolls, the Biden administration increased the federal share of Medicaid spending — but that enhanced match rate is set to expire by the end of this year.

As a result, officials expect the rate of state spending on Medicaid to grow to 17.2% in fiscal 2024, up from 13% in fiscal 2023, as the additional federal assistance is phased out, according to the new KFF survey.

However, total Medicaid spending — including both federal and state funds — is expected to slow from 8.3% in the 2023 fiscal year to 3.4% in the 2024 fiscal year.

State Medicaid agencies said shrinking enrollment is the most significant factor lowering total spending.

But some factors are still creating upward pressure on spending, such as provider rate increases.

Some states are increasing rates for providers in the 2023 and 2024 fiscal years — especially for nursing facilities and home and community-based services — likely in response to ongoing staffing challenges, KFF said.

Behavioral health and primary care providers are also seeing rate increases from the majority of states.

New York, for example, is raising its base rates for fee-for-service providers, moving to the upper payment limit allowed under the law — but reimbursement continues to be an issue, according to Amir Bassiri, the deputy commissioner of New York’s health insurance office and the state’s Medicaid director.

“We’re always playing catch-up, and there are limits to what we can do,” Bassiri said during the webinar.

States generally appear to be on solid financial footing as they ready to take on a greater share of Medicaid spending, according to KFF. States had expected declining revenue collections in the 2023 fiscal year, but collections exceeded expectations in most states, according to NASBO.

Utah, for example, is in a position of financial strength after its population ballooned over the pandemic, according to Jennifer Strohecker, Utah’s Medicaid director. Utah elected to first review the eligibility of Medicaid beneficiaries who weren’t utilizing as many services first, with hopes that the rate of disenrollment would taper off as unwinding continued.

But “our disenrollment has actually continued at an aggressive pace since unwinding started seven months ago” and has complicated forecasting, Strohecker said during the webinar.

”It’s been challenging,” Strohecker said. “It’s been an interesting year.”

 

Source Link

arrowcaret-downclosefacebook-squarehamburgerinstagram-squarelinkedin-squarepauseplaytwitter-squareyoutube-square