For years, the federal government and states have sought to get rid of enrollment barriers in Medicaid. Now a number of states are reversing course: 14 states have approved or pending Medicaid 1115 demonstrations designed to restrict Medicaid eligibility. Attention has focused on the demonstrations’ work mandates, but the experiments involve much more. Other features include extensive reporting rules — in some proposals enrollees must report on their eligibility status weekly — as well as premiums, coverage lock-out periods for “noncompliant” people, and a return to cumbersome paper verification requirements and asset tests.
How Did the ACA Improve Medicaid Enrollment?
The ACA streamlined Medicaid enrollment in order to promote stability and avoid frequent breaks in coverage. Reforms aimed at making Medicaid work more like other forms of health insurance included a simplified online application coupled with an easier renewal process. The law eliminated in-person application requirements and unnecessary paper verification, and emphasized accessible community enrollment locations.
These reforms were meant to work in tandem with the health insurance marketplaces, to help lower-income working families that experience modest and periodic income shifts from wage fluctuations that necessitate moving between Medicaid and the marketplace. The reforms also grew out of states’ own experience with past eligibility reforms and build on the success of the Children’s Health Insurance Program.
The ACA’s simplified eligibility and enrollment reforms were also the result of research documenting the link between stable coverage and better health care access, both generally and for people with serious health problems. As dozens of states have sought to tackle Medicaid payment and delivery reform to improve care and lower costs, they have simultaneously tried to reduce coverage interruption, a phenomenon known as churn, by improving eligibility and enrollment processes.
Last summer, Arkansas became the first state to implement a 1115 demonstration involving work requirements. Yet Arkansas Works, which is leading to declines of 4,000 enrollees a month, is now showing that these demonstrations can lead to eligibility losses far greater than the small number of enrollees who can work but choose not to do so. Recent research suggests that only about 2.8 percent of beneficiaries in expansion states and less than 1 percent in nonexpansion states fall into this category. Savings from eliminating them would therefore amount to less than 1 percent of total Medicaid spending. The Arkansas experience suggests that adding hoops to jump through to get and keep coverage, including complicated online systems with limited hours of operation, can have a far greater impact on coverage losses.
We may never know with any reliable evidence just how many people have been unfairly terminated from coverage. The U.S. Department of Health and Human Services has permitted Arkansas to implement its experiment without an evaluation in place to ensure that information is being collected on who is losing coverage and why, and how the loss of coverage is affecting their access to care. Thousands of working people may be losing Medicaid simply because they cannot navigate the new system.