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Half a million Texans have lost their Medicaid coverage since April, mostly for procedural reasons like not responding to letters from the state.
preliminary The data, released Friday by the state’s Health and Human Services Commission, paints a bleak picture of Texans’ early efforts to redefine Medicaid eligibility for the first time since the COVID-19 hit three years ago.
This “relaxation” was not easy anywhere. But Texas—with its high uninsured rates, strict rules for Medicaid eligibility and persistent delays in verifying eligibility—was on a particularly poor footing to handle the sudden influx of renewals.
Now, hundreds of thousands of Texans are scrambling after suddenly losing health insurance — and the ongoing care from the trusted healthcare providers that enabled them to access it. In the meantime, advocates say many people who have lost coverage may actually still qualify, and they are calling on the state to pause redefinitions so they can ensure low-income kids don’t fall through the newly appeared cracks in the renewal system.
“If the high rate of procedural denials continues, Texas will be on the verge of depriving many eligible children of their health insurance,” said Diana Forrester, director of health policy at Child Care Texas. “If state leaders cannot quickly shift to a more effective process, they should consider pausing Medicaid removals until they can do it right.”
Relax after three years
Texas is one of only 11 states that have not expanded Medicaid eligibility under the Affordable Care Act, and it has the highest rate of uninsured residents in the country. Before the pandemic, Medicaid in Texas mostly served children, disabled adults, and pregnant women up to two months after giving birth.
Once the pandemic hit in March 2020, federal regulations prohibited anyone from being removed from the program. The expanded coverage has allowed about 3 million Texans to continue receiving Medicaid after they are dropped from the program.
Federal funding legislation lifted that protection in April, starting a year-long process for states to decide who should remain on Medicaid and move those who don’t into other state programs or into the public health insurance market.
“Normal Texas rules are the most restrictive in the United States,” said Anne Dunkelberg, senior fellow at Every Texan, a healthcare advocacy group. “We’d been carrying all these desperately poor parents through the entire pandemic, and we knew the lion’s share of them weren’t going to be rehabilitated.”
In the first month of this process, Texas reviewed the eligibility of nearly 800,000 people. The state hasn’t released demographic data, but said it started with people who likely no longer qualify for the program, such as people who are past the age of majority or those who no longer have an eligible child in their home.
Of those initial cases, about 111,000 people have been determined to still qualify for Medicaid, or the Children’s Health Insurance Program. About 95,000 people were found to no longer qualify.
But an additional 400,000 people were removed from Medicaid for procedural reasons, meaning the state terminated their coverage without reviewing their eligibility. This includes people who have not sent their renewal package in the mail or via YourTexasBenefits.com within 30 days.
“The review process is confusing and frustrating for families,” says Graciela Camarena, director of the child health outreach program at the Children’s Defense Fund of Texas, which helps families in the Rio Grande Valley navigate public benefit programs.
Camerana said in a statement that customers received notifications at old addresses, in a language not listed as their primary language or after the deadline had already passed. The state worked with advocates, health care providers and insurers to try to get the word out about the upcoming renewal process, but procedural errors and delays hampered the process even when people were aware of the steps they needed to take.
“We’ve even seen families receive multiple letters at the same time — one saying they qualify, another saying they don’t,” Camarina said. “The issue is the process, not the people. These are mostly parents who are just trying to give their children a chance to stay healthy.”
In a statement, HHSC spokeswoman Tiffany Young said the agency used a “multi-pronged” strategy to reach people, including mailing notices, sending text messages, hosting events and collaborating with community partners. The state is also urging everyone currently receiving Medicaid or CHIP benefits to ensure their information is updated on YourTexasBenefits.com.
Nationally, 75% of removals were for procedural reasons, compared to 81% in Texas. But researchers worry that particularly strict Medicaid regulations in Texas mean there is a greater risk of greater harm.
“Children’s eligibility doesn’t change much,” said Gabe Aboulafia, Ph.D., health policy. Harvard student studying layoffs. “Because the state has not expanded, we can say with great confidence that many of those people who were improperly fired were children who may still have actually qualified.”
Research shows that any gap in coverage, even just a few months, can have devastating financial and health consequences for families, said Aboulafia.
The new Texas data also shows that the state is not taking advantage of other tools to determine eligibility. Less than 1% of people have had their eligibility reviewed through a “one-party” system, which allows the state to verify eligibility using third-party data such as federal benefits information.
“More people end up achieving coverage through this automatic renewal, because they don’t have to provide any updated information,” Aboulafia said. “It’s the biggest thing Texas can do to ensure people keep their coverage.”
Some states rely heavily on this administrative review, with a quarter of states using unilateral data for the majority of their renewals. In data released Friday, HHSC indicated that the rate of approvals is expected to increase along with third-party data as the agency begins reviewing cases most likely to continue to qualify for Medicaid. But Donkelberg said Texas has long lagged behind the national average in unilateral reviews, in part because of onerous regulations like refusing to accept income statements more than two months old.
While the Texas House of Representatives passed a bill that would expand HHSC’s ability to use the individualized system to verify children’s eligibility for health insurance, the measure has not been approved by the Senate.
The Legislature also granted only $111 million of the $143 million needed to support an expected increase in Medicaid renewals.
Young said the state is on schedule to complete the redefinition process as planned. With another 3.6 million cases expected for review in the next three months, including many new moms, the gap between what advocates hope and what Texas has to offer is expected to widen.
“The governor can mitigate this damage by stopping to look at why this is happening — and fix it,” said Adrienne Lloyd, director of health policy at the Texas Children’s Protection Trust. “We urge him and Texas leaders to … take advantage of the full schedule and flexibility provided by the Center for Medicaid and Medicare Services to complete this process — so that Texas will no longer remove children, seniors, and people with disabilities from health care.”
Disclosure: Every Texas and Texas childcare organization has been a material supporter of The Texas Tribune, a nonprofit, nonpartisan news organization funded in part by donations from members, foundations, and corporate sponsors. Financial backers play no role in the Tribune press. Find a full list of them here.
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