Medicaid Unwinding: How Present Struggles Could Pave Future Accessibility


Medicaid unwinding has been a hot topic in the healthcare and insurance world since it began in April. Many states aren’t complying with federal renewal regulations, resulting in millions of Americans being wrongfully disenrolled from Medicaid. This process is shining a spotlight on some of the inherent structural and procedural accessibility issues that currently affect Medicaid and other public assistance programs. Simultaneously, it offers a clear view of what will and will not improve these issues moving forward, as states implement their own methods of mitigation with varying rates of success.

So why does access matter in the first place? At Ignitist, we understand how greater healthcare accessibility ultimately benefits all Americans. As specialists working with the Medicare-Medicaid dual eligible population, we know that the people with consistent access to proactive and preventative healthcare throughout their lives are more likely to age in good health compared to those without, thereby reducing healthcare costs for the state when they age into Medicare.

Supporting this, Medicare Payment Advisory Commission (MedPAC) data reported in 2004 and 2022 show that dual eligibles aged 65 and over have higher average healthcare costs than those under 65; the 2022 report also acknowledges that a larger percentage of dual eligibles aged 65 and over suffer from certain chronic conditions, such as Alzheimer’s disease or related dementia, diabetes, heart failure, hypertension, and ischemic heart disease. The Healthcare Imperative, a workshop series summary from 2009, suggests that broader application of certain preventative services could reduce healthcare spending and increase the quality of life for recipients.

Accessibility of Medicaid is linked to the uninsured rate, which directly affects whether someone is able to seek necessary or preventative medical care. KFF reports that many American citizens living in poverty are unable to afford health insurance because their states of residence (concentrated largely in the South) haven’t expanded Medicaid, and the uninsured rate for those states is nearly twice that of expansion states. Despite these states’ apparent attempt to spend less on healthcare, The Commonwealth Fund reports that many of these southern states are spending more money per Medicare beneficiary for lower quality care.

Supporting broader, earlier access to preventative care through Medicaid may prevent or delay the development of costly chronic conditions in future Medicare beneficiaries, thereby increasing their quality of life and decreasing their burden on governmental Medicare expenditures. Given the supporting data, it is imperative to prioritize Medicaid access across the United States. Exploring current areas of strength and weakness with respect to Medicaid unwinding offers a glimpse into what future accessibility initiatives may look like.

Medicaid Unwinding Turmoil

To review the key facts, Medicaid programs received increased federal funding and offered beneficiaries continuous coverage during the public health emergency (PHE), thanks to the Families First Coronavirus Response Act (FFCRA) passed in early 2020. As a result, more Americans would gain health insurance than ever – the national uninsured rate reached a record low of 8.0% in 2022, and an even lower 7.7% in early 2023, reflecting 6.3 million people gaining coverage since 2020.

The PHE ended on May 11, 2023, and April marked the beginning of Medicaid unwinding, the process of redetermining Medicaid eligibility for all enrollees. KFF’s Medicaid Enrollment and Unwinding Tracker reports, as of December 20, 2023, that at least 13,379,000 Medicaid enrollees have been disenrolled since April, more than twice the number of people who gained coverage between 2020 and 2023. Disenrollment rates vary greatly by state, and 71% of disenrollments were procedural, meaning enrollees failed to respond to a renewal form in a timely manner.

As these numbers suggest, many eligible citizens are being wrongfully disenrolled from Medicaid. Much of this is due to state noncompliance with federal renewal regulations, which the Centers for Medicare and Medicaid Services (CMS) published a summary of by state in July. States have since been under increasing pressure from CMS to fix state systems and processes. The final interim rule published by CMS on December 6, 2023, which threatens to enforce penalties on noncomplying states, comes on the heels of months of compliance reminders, direction, and suggested mitigation strategies. Procedural disenrollments could be alleviated by proper implementation of ex parte renewals, or automated renewals based on reliable existing data, which are federally mandated under the Affordable Care Act (ACA). CMS lists issues with ex parte renewals as a common source of noncompliance.

Some states have drawn particularly heavy criticism for their conduct during the unwinding process. A class-action lawsuit was filed against Florida in August, citing violations of due process during unwinding. A July whistleblower report from within Texas Health and Human Services raised strong concerns over the effects of noncompliance with federal regulations and the competence of the people in charge, as did a letter to CMS from U.S. Rep. Lloyd Doggett in early December. In an interview for Kera News, Policy advocate Stacey Pogue claims that Texas dismisses a lot of reliable, existing data in favor of asking citizens to present proof of income, thereby complicating the process for citizens and state eligibility workers alike. A report from Axios suggests there may be a partisan divide in reviewing Medicaid eligibility, given that 60% of disenrolled children are concentrated in 9 Republican-led states, in particular the states that have not expanded Medicaid.

Necessary Measures

Ex parte renewals have been federally mandated for quite some time and have the potential to ease the burden on beneficiaries and state eligibility workers alike; however, the number of ex parte related operational issues reported by CMS, as well as the long wait times experienced at many state call centers, suggest these systems aren’t as effective as they could be. While there has been some speculation that some states are willfully not complying with this requirement, the unwinding process has brought many of the barriers to implementing ex parte renewals to light, especially for the most vulnerable Medicaid recipients.

The Medicaid and CHIP Payment and Access Commission (MACPAC) coordinated a roundtable in September to discuss some of these barriers. Many states struggle with data access and conflicting data for enrollees. Improving integration between Medicaid eligibility systems and other public services like SNAP and TANF may help with data access. Many states implement data source hierarchies to help resolve conflicting information about enrollees, but different data sources may be more or less important depending on whether the enrollee’s eligibility is determined by their Modified Adjusted Gross Income (MAGI). Most state roundtable participants reported that they don’t use different data source hierarchies for MAGI and non-MAGI enrollees; doing so may help to streamline a greater number of applications.

It’s generally easier to conduct an ex parte renewal for MAGI enrollees than it is for non-MAGI enrollees, whose eligibility is usually determined by age or disability, and who often require verification of assets. Non-MAGI enrollees are a more vulnerable subgroup of Medicaid recipients who are more likely to face difficulties engaging with the redetermination process and could benefit the most from ex parte renewals. Regardless, roundtable participants acknowledged that many state eligibility systems cannot process non-MAGI ex parte renewals, and that they struggle with effective implementation of electronic Asset Verification Systems (AVS) to do so. Not all financial institutions participate in AVS, and some AVS inquiries take longer than others to return information. It is crucial that states update their systems to process ex parte renewals for this vulnerable population to minimize their chance of coverage loss.

CMS could support states in this effort by assisting them in the implementation of new eligibility systems, and by incentivizing more financial institutions to participate in AVS. Roundtable participants also agreed that waivers offered during the unwinding process have offered invaluable flexibility with respect to streamlining applications, and suggested these become permanent.

Of course, no matter how effective the electronic systems become, there will always be instances where gathering information from the enrollee is necessary to determine eligibility. A recent article from Modern Healthcare acknowledges that simply reaching potentially eligible people is one of the biggest obstacles states are facing right now. In their outreach efforts, New York has found texting to be an effective method of reaching their population, and has offered special support to Medicare-Medicaid dual eligibles during the unwinding process. Arkansas launched an address update hotline. Indiana has involved many other state agencies in their outreach efforts, such as workforce development and child services.

Maximizing the lines of communication between enrollees and state eligibility systems minimizes the chances of some enrollees falling through the cracks. Stronger collaboration between internal state agencies is a particularly strong line of communication, as eligible individuals can become connected to Medicaid workers through a trusted source.

State Medicaid agencies struggling with outreach and ex parte implementation could benefit from communicating with and employing successful methods from other states. MACPAC roundtable participants even suggested public information sharing of different ex parte policies and processes, and that state employees may be able to implement and improve upon solutions developed for other states. This collaborative approach could rapidly accelerate the improvement of ex parte processes.

CMS has been working with states to improve their processes over the course of the unwinding process, and continuing to do so may prove beneficial. There are obvious flaws that need to be addressed in state Medicaid systems and processes, and additional oversight would encourage accountability as states fix their internal processes. Persistent evaluation of effectiveness, identification of areas of noncompliance, enforcement of regulations, and assistance in correcting flawed systems are all areas in which CMS could assist. Additionally, by working more closely with state Medicaid agencies, CMS could more easily identify and address hidden obstacles complicating compliance.

In Summary

Greater access to healthcare improves one’s quality of life and may decrease federal spending; therefore, we should make every effort to enact and preserve the accessibility of Medicaid. Even though Medicaid unwinding exposed many flaws and obstacles affecting its accessibility, it also offers an opportunity to amend these systems. State Medicaid agencies and CMS have the chance to strengthen ex parte renewals, expand outreach efforts, improve state collaboration, and continue to work together to fix state systems and processes. All citizens benefit from healthcare accessibility – now, we must do what we can to defend it.