Medicaid ‘unwinding’ in Pennsylvania is hurting children, advocates say

Pittsburgh Post-Gazette (October 23, 2023) – As Pennsylvania shrinks its Medicaid roll by working to remove people who became ineligible during the pandemic, many children are feeling the impact – some of which shouldn’t have.

Nearly a quarter of disenrollments reported by Pennsylvania’s Department of Human Services so far are under age 21. And due to a nationwide system glitch, some eligible children could have wrongly lost coverage.

Pennsylvania was among a few dozen states to report a problem in the way they conducted eligibility checks, automatically disqualifying entire families if they found one person was no longer eligible. With children being more likely to qualify for Medicaid due to more generous eligibility thresholds, the error is expected to disproportionately hurt this group. The scope of the problem in Pennsylvania remains uncertain as DHS works to re-evaluate cases at an individual level.

Cristina Codario, policy director at Pittsburgh’s Allies for Children, worries about families who could slip through the cracks, losing out on coverage they are entitled to due to the mishap.

“That was a big mistake for 30 or so states,” Ms. Codario said. “This is just one example where children are impacted more than adults.”

Following the end of COVID public health emergency, Pennsylvania has resumed renewing individuals’ Medicaid and CHIP enrollment after a pandemic-era protection blocked them from doing so. The state has purged over 260,000 people, including more than 63,000 individuals under age 21, from its Medicaid rolls so far, a DHS tracker shows.

More children, 51%, have lost their Medicaid coverage from the unwinding because of administrative or paperwork reasons, rather than due to lack of eligibility. This can result from families’ confusion around the paperwork, failure to return documentation on time or the state sending renewal forms to old addresses.

The COVID-era protection had effectively preserved coverage for nearly all Medicaid enrollees for the past three years – a safety net that proved highly successful at safeguarding kids’ access to healthcare coverage, advocates say.

“The pandemic made it simple,” Ms. Codario said. “The kids were covered under their insurance, and that was that.”

Halfway through the review, more than 1 million children nationwide have lost Medicaid over the past six months. While advocates hope to see kids transitioning to other forms of coverage, like CHIP, a September report from the Georgetown Center on Children and Families shows CHIP enrollment hasn’t kept pace, remaining relatively flat.

But the fact that so many kids were losing coverage in the first place, despite enjoying a higher income eligibility threshold, had already raised questions for Becky Ludwick, vice president of public policy at Pennsylvania Partnerships for Children.

“Right there is a red flag that something is going on,” Ms. Ludwick said. “Where there are children who are likely still eligible for Medicaid but have lost their coverage during this unwinding process. That is what our concern has been all along.”

It turned out that there was a major fault in states’ eligibility systems that determined eligibility on a household basis rather than individual basis, which the federal government discovered this summer. In August, the Centers for Medicare & Medicaid Services issued a call to action for states to figure out if they were making the mistake and reinstate coverage for those affected.

In the letter, CMS called auto-renewals, also known as “ex parte” renewals, “one of the strongest tools” states had at their disposal to keep eligible people enrolled in Medicaid or CHIP coverage during the renewals process. States were using information already available to them through existing reliable data sources.

Since the letter, 30 states, including Pennsylvania, reported the error. Half a million children and families nationwide have since regained their Medicaid and CHIP coverage, as of late September.

“How that played out was that the renewals were only being done for that parent and not for their children,” Ms. Ludwick said. “And so unfortunately, it appeared, that if the parent received a packet in the mail that they were no longer eligible, unfortunately, their children were not found eligible either.”

A 2022 report by Pennsylvania Partnerships for Children showed that the state’s child uninsurance rate decreased slightly between 2019 and 2021, from 4.6% to 4.4%. This was encouraging progress, as the report indicated that the trend was heading in the opposite direction before the pandemic.

Medicaid enrollment in children increased by a historic 20% during COVID. More than 1.4 million Pennsylvania children had Medicaid for their health insurance, the organization found. Publicly funded or supported healthcare options covered 47% of Pennsylvania children – up from 46% the previous year.

The researchers purported that the recent gains, while slight, came from the Medicaid disenrollment freeze.

“Continuous coverage actually helped with keeping kids covered through health insurance,” Ms. Ludwick said. “That was really, I think, an exciting result of the Medicaid continuous coverage, keeping kids connected even longer.”

The return to regular Medicaid operations, beginning this April, has posed the largest test to the system yet, Ms. Ludick says. She wonders how DHS will handle the additional strains.

“The concern we have is how are they going to complete those with the manpower that they currently have?” she said. “Because the unwinding process in and of itself is a big task. We’re concerned about how they’re adding on that extra workload, keeping up not only with the unwinding process as it continues on, but also in fixing the errors and making sure that the individuals, and the children in particular, are reinstated.”

A process designed to alleviate some of the burden of the unwinding has wrought more confusion and administrative headache, and Ms. Codario says children’s advocacy groups are working to let people know they could be affected.

“The problem is that we need to find those families, locate them, tell them, ‘Hey, you should be on Medicaid still,’ and hopefully they haven’t gone somewhere else,” she said. “That’s really where the issue is.”

In a statement to the Post-Gazette, DHS says Pennsylvania has been operating under a CMS-approved unwinding strategy plan that included approval of the eligibility determination at the household level since April.

Pennsylvania’s systems are not currently built for ex parte, or automatic, renewals at the individual level, but in September, the department began instituting a “manual change” to examine cases at the individual level rather than household level.

The department believes their initial estimate of 100,000 is likely higher than the number of people affected, and they are working to determine that number. Kaiser Family Foundation reports a national average rate of 72% for procedural terminations among all disenrollments, compared to procedural terminations accounting for 46% of disenrollments in Pennsylvania, DHS wrote.

“Our overall renewal response rate has been strong with our procedural termination rate among the lowest nationwide,” the statement read. “Regardless of these changes – the best thing a person can do to stay covered is keep their contact information up to date with DHS through COMPASS or the My COMPASS PA mobile app and complete their renewal on time when it is their turn. We remain focused on doing all we can to assist Pennsylvanians through this critical process so they can protect their health and stay covered.”

There is one recent bright spot – in September, the federal government issued a mandatory 12-month continuous enrollment for children in Medicaid and CHIP, keeping them covered even if their family’s income fluctuates throughout the year.

Allies for Children, Pennsylvania Partnerships for Children and over 20 other organizations statewide want to take this a step further, sending a letter to DHS Secretary Val Arkoosh urging the department to consider implementing multi-year continuous coverage for young children in Medicaid.

“What it comes down to is that children need that continuous coverage because it is so key for their lifelong health and well being,” she said. “Individuals with inconsistent access receive delayed preventative care, they have more ER visits. Medicaid provides such a comprehensive benefit – that’s really where we want to see children.”

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