Medicaid Under Fire: The Unwinding & Its Impact

The Great Unwinding

As the country moves further from the COVID-19 pandemic, a major change is underway for millions of Americans who rely on Medicaid, the nation’s largest health insurance program that currently provides free or low-cost coverage to millions of low-income Americans and children.

This shift, known as “the great Medicaid unwinding,” marks the transition from the temporary emergency measures that were in place during the pandemic to pre-existing Medicaid rules and procedures.

Pandemic coverage

Enhanced provisions and temporary expansions of Medicaid coverage were enacted during the COVID-19 public health emergency. Under the Families First Coronavirus Response Act (FFCRA), states were required to keep individuals enrolled in Medicaid for the duration of the emergency, regardless of changes in their income or other eligibility criteria.

This federal aid came with the condition that states could not disenroll anyone during this period. While the policy was in place, enrollees were spared regular eligibility checks. Enrollment in Medicaid and the Children’s Health Insurance Program swelled to a record of more than 90 million, and the nation’s uninsured rate dropped to record lows.

However, a year and a half into what is the biggest upheaval in the 59-year history of the government health insurance program for people with low incomes and disabilities, states have reviewed the eligibility of more than 28 million people. Approximately 23 million—including 3 million children—have lost or stand to lose coverage, not because they were ineligible, but because of paperwork and procedural technicalities.

Gaps in coverage

At an Ethnic Media Services briefing on August 9, 2024, experts discussed how to strengthen the Medicaid program to provide equitable health coverage to all and why states must act to close the coverage gap that disproportionately affects communities of color.

Most disenrollments were due to procedural errors resulting from Medicaid recipients (or their guardians) failing to complete the renewal process as required. Factors contributing to this included outdated contact information preventing the delivery of renewal notices or administrative oversights such as lost paperwork. Consequently, individuals were terminated from the program without a reassessment of their eligibility.

This is particularly challenging for immigrants who often face more complicated eligibility rules compared to U.S. citizens. Many immigrants may have had their Medicaid coverage extended during the pandemic but could now find themselves ineligible due to strict eligibility criteria. This includes restrictions based on legal residency status and income levels, which can vary significantly by state, explains Katherine Hempstead , Senior Policy Adviser at the Robert Wood Johnson Foundation.

The uninsured

While those who have been disenrolled by states have other coverage options, including remaining on Medicaid or enrolling in individual coverage under the Affordable Care Act, there are still those who aren’t insured, especially young adults, ages 18 to 24. “A third of young adults are facing a mental health crisis, reporting symptoms of mental illness, depression, anxiety, and loneliness. Young adults remain the highest uninsured population of any age group,” says Martha Sanchez , Health Policy and Advocacy Director at Young Invincibles .

What is most concerning to officials is the rate at which children lost their coverage. The unwinding increased “ churn ,” in which enrollees disenroll and then re-enroll within a short time. Churn rates were highest among children across racial and ethnic groups following annual renewal.

Impact on children & people of color

In eight states (Alaska, Arkansas, Colorado, Idaho, Montana, New Hampshire, South Dakota, and Utah), so many children were disenrolled that fewer children were covered than were enrolled before the pandemic. The number of children who lost coverage in four states (California, Georgia, Florida, and Texas) represented half of the total number of children nationwide who were left uninsured.

So, “instead of saying, we’re going to take away your healthcare until you tell the government what it already knows. We ought to be saying it’s the obligation of States to use available data to renew and qualify people whenever possible, thus eliminating paper with burdens for them,” said Stan Dorn, Director of the Health Policy Project at UnidosUS. “Culturally appropriate sources of assistance, so that people can pick up the phone and talk to somebody who can help them figure out what the heck to do and help them fill out those forms, upload the documents. That way, the administrative burden is lifted off a frequently overburdened and under-resourced family, and given to somebody who knows how to handle the situation and can help that family move forward,” he adds.

The unwinding of Medicaid policies presents significant challenges, particularly for immigrants and people of color. As states navigate this transition, it is crucial to address these challenges through targeted support and policy adjustments. By focusing on equity and providing necessary resources, we can help ensure that all individuals, regardless of their background, continue to have access to essential healthcare services.

Image by Julio César Velásquez Mejía from Pixabay

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