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States' efforts to requalify Medicaid and Children's Health Insurance Program (CHIP) recipients after the COVID-19 public health emergency ended have hit a few bumps in the road.

As of September 23, a total of 7.5 million people nationwide had been disenrolled from their Medicaid or CHIP coverage as a result of state "redeterminations" -- the process of requalifying Medicaid recipients for the program -- .

During the height of the COVID-19 pandemic, the federal government required states to let current Medicaid and CHIP recipients stay in those programs regardless of their eligibility status, but that rule ended on April 1 and states have been undergoing the requalification process -- known as "unwinding" -- ever since.

But on August 30, the Centers for Medicare and Medicaid Services (CMS) saying that the agency "has learned of additional systems and operational issues affecting multiple states, which may be resulting in eligible individuals being improperly disenrolled. ... [T]hese actions violate federal renewal requirements and must be addressed immediately."

Specifically, the issue that concerned CMS officials had to do with auto-renewals -- also called "ex parte" renewals -- which the agency constitute "one of the strongest tools that states have to keep eligible people enrolled in Medicaid or CHIP coverage."

"States are required by federal regulation to use information already available to them through existing reliable data sources (e.g., state wage data) to determine whether people are still eligible for Medicaid or CHIP," the agency said. "Auto-renewals make it easier for people to renew their Medicaid and CHIP coverage, helping to make sure individuals are not disenrolled due to red tape." However, "CMS believes that eligibility systems in a number of states are programmed incorrectly and are conducting automatic renewals at the family level and not the individual level, even though individuals in a family may have different eligibility requirements to qualify for Medicaid and CHIP."

"For example, children often have higher eligibility thresholds than their parents, making them more likely to be eligible for Medicaid or CHIP coverage even if their parents no longer qualify," the press release said. Therefore, the auto-renewals error "may have a disproportionate impact on children."

The CMS letter asked states to review their auto-renewal policy and notify CMS no later than September 13 if they found any issues with the auto-renewal process. On September 21, CMS's parent agency, HHS, that 30 states had reported problems, and that 500,000 children and adults got their coverage restored thanks to the agency's actions. "Many more are expected to be protected from improper disenrollments going forward," the release said.

"HHS is committed to making sure people have access to affordable, quality health insurance – whether that's through Medicare, Medicaid, the [Affordable Care Act] marketplace, or their employer," HHS Secretary Xavier Becerra said in a statement. "We will continue to work with states for as long as needed to help prevent anyone eligible for Medicaid or CHIP coverage from being disenrolled."

HHS's actions were a step in the right direction, said Allison Orris, JD, a senior fellow at the Center on Budget and Policy Priorities in Washington, D.C. "I do think [the agency] took important action over the last several weeks in identifying a problem leading to too many coverage losses, and needless coverage losses," she said in a phone interview. "And many states are rising to the occasion and thinking about updating their systems to improve communication with enrollees, and that's all good," although coverage losses are happening somewhat more quickly than anticipated.

Not having coverage can have negative effects, according to a from the Urban Institute. The report found that Medicaid-eligible adults who weren't enrolled in the program were much less likely to have a usual source of care than adults who were enrolled in Medicaid (37.0% vs 69.9%, respectively). They were also less likely than their Medicaid-enrolled counterparts to have had a doctor visit or have filled a prescription within the preceding year, the researchers found.

"I don't think it should be surprising," Katherine Hempstead, PhD, senior policy advisor at the Robert Wood Johnson Foundation in Princeton, New Jersey, said in a phone interview. "People that are eligible but not enrolled do behave differently than people who are enrolled in the way they seek care in the outpatient setting. There are negative health consequences to being eligible for Medicaid, but not enrolled."

Why are eligible people not enrolled in the Medicaid program? "There is a group of people that it's widely believed that maybe they're distrustful of government, or they don't want to give a lot of information to the government, or maybe they just have absolutely no feeling that they need to have any encounter with the healthcare system," Hempstead said. "Probably that is not a good [idea] because they're not getting cancer screenings and things like that."

There is also another group that "churns" in and out of Medicaid for various reasons, such as "because they changed addresses and missed the renewal form," she added. "This was always happening, and then during the pandemic it stopped because of the continuous coverage requirements."

The pandemic provided some important lessons for policymakers regarding a continuous coverage requirement, Orris said. "It's important to ensure that Medicaid's resources are used for people who are eligible for Medicaid," she said. "So going forward, it's appropriate to redetermine people and assure that people are getting the coverage they're eligible for. But we also learned important lessons from the pandemic about how easing eligibility and enrollment systems can have an impact on continuity of care for people [who are] more likely than not to remain eligible," even if they don't stay in the program continuously.

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