States Can Begin Verifying Medicaid Eligibility for First Time in 3 Years

When people receive benefits they’re not supposed to get, that leaves less money for everything else the government does.

By Kyle Wingfield, President and CEO of Georgia Public Policy Foundation.

Here we go again.

For months, advocates for more taxpayer-funded healthcare have warned of a looming drop in Medicaid coverage. They blamed this on the official end of the COVID-19 “public health emergency” and associated relief funds.

But as I pointed out earlier this year, the real issue is that millions of people have been receiving a taxpayer-funded benefit for which they no longer qualify. That’s because the relief funds in question were contingent on states not asking Medicaid enrollees whether they were still eligible for the program. The end of the public health emergency meant that states would resume doing what they had done for the first 50-plus years of Medicaid.

This is not merely a cost-cutting matter. When people receive benefits they’re not supposed to get, that leaves less money for everything else the government does. And because Medicaid is a joint program between states and the federal government, and states have to balance their budgets, that means less money for schools, roads, parks, state troopers … the list goes on.

That’s why “Ineligible people lose taxpayer-funded benefit, after years of receiving it anyway” would be a more accurate headline, even if it tells a story certain advocates are loath to admit.

Sure enough, the public health emergency ended officially on April 1, and states began re-checking enrollees’ eligibility. On cue, we are being treated to more breathless headlines like this one from this past week:

“States asked to slow Medicaid cuts after over 1 million enrollees dropped.”

Out of context, that might sound like a lot of people. But is it?

Not at all. In December, the Urban Institute estimated 18 million Medicaid recipients would be dropped from the program within 14 months of the public health emergency ending because they were no longer eligible for it. The Congressional Budget Office has estimated 15.5 million people would leave Medicaid in 2023-24 when states resumed verifying eligibility.

Given those estimates, it should hardly be surprising that 1 million people would lose Medicaid coverage during the first two months after the public health emergency ended. If anything, we might have expected an even larger number.

Again, I can think of an alternative headline that paints a fuller picture of what’s going on: “Taxpayers still foot the bill for up to 17 million ineligible Medicaid recipients.”

Importantly, neither projection assumes that all of these people will become uninsured. The Urban Institute estimates that almost 80% of the ineligible will simply enroll in another form of insurance. That includes 3.2 million children who will just shift to a different type of Medicaid. The CBO is somewhat more pessimistic but still forecasts that 60% of the ineligible will find another type of coverage.

The screaming headline about “over 1 million enrollees (being) dropped” doesn’t account for any such changes.

As for “slow(ing) Medicaid cuts,” the unnamed person in the headline asking states to do so is Xavier Becerra, the secretary of health and human services. In a June 12 letter to governors, Becerra declared himself “deeply concerned with the number of people unnecessarily losing coverage” for “avoidable reasons.”

How did those words “unnecessarily” and “avoidable” make their way into his letter? Becerra appears to be most concerned about “people losing coverage due to administrative processes.” This is another way of saying what various news reports have suggested, which is that people are being removed from the Medicaid rolls because they haven’t submitted the required paperwork or documentation.

Now, why might a person not submit paperwork or documentation? One probable reason is that they no longer qualify for the program, so they didn’t reapply for it. 

And just like the headline writer, Becerra makes no allowance for the possibility that many, most or all of these people “unnecessarily” losing coverage have already found a different type of insurance – even though it’s highly likely they did.

This is the primary way our government grows out of control: by expanding “temporarily” during a crisis, and then trying to make that expansion permanent. We shouldn’t fall for it this time.

This article was republished with the permission of Kyle Wingfield and Georgia Public Policy Foundation.

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