Many Children May Have Lost Medicaid Coverage Because of State Errors

Federal officials have discovered major errors in the systems and procedures that some states have been using to verify eligibility for Medicaid, possibly leading to a substantial number of children losing health coverage despite still being eligible for it.

State agencies have been “unwinding” a pandemic-era policy that allowed people to keep their health insurance coverage through Medicaid, the joint federal-state program for low-income Americans, without regular eligibility checks.

After that rule lapsed in April, at least a million children have lost coverage, researchers have found, despite having significantly higher eligibility limits than adults.

In a letter addressed to state Medicaid agencies, Daniel Tsai, a senior official at the Centers for Medicare and Medicaid Services, warned that technical errors may be to blame for many disenrollments.

Mr. Tsai told reporters in a press briefing Wednesday that the problem was “a very specific systems glitch that we think has tremendous implications for eligible kids and families maintaining coverage.”

Many states are conducting what are known as “ex parte” renewals, or automatic checks that rely on databases, such as state wage records, to determine whether people are still eligible for Medicaid coverage.

States are required to vet the eligibility of recipients individually. But after conducting the automatic renewals, some states appear to have sent renewal forms requesting information for all household members and to have disenrolled everyone if the forms are not returned, including those who should have been deemed eligible through the ex parte process, Mr. Tsai wrote in the letter.

Children may have been disproportionately punished by this practice, officials said on Wednesday.

The administration ordered states that identify this error to fix their eligibility systems, to pause removals and to reinstate those who had been affected by the mistakes.

The letter amounted to one of the most confrontational actions that federal officials have taken since the start of the unwinding, which has led to over 5.5 million people losing coverage, according to state data analyzed by KFF, a health policy research organization.

Mr. Tsai declined to disclose the states where officials had discovered the problem but said that state agencies had two weeks to check for it and report back to the federal government.

A spokesman for Mr. Tsai’s agency later said that more than a dozen states believed they were affected.

From the outset of the pandemic until the beginning of April, states were not allowed to kick people off Medicaid under a provision in a 2020 congressional coronavirus relief package.

That law, which offered additional federal funding to states, increased enrollment in the program to record levels. Early this year, 93 million people were enrolled in Medicaid or the Children’s Health Insurance Program, up from 71 million before the pandemic.

Researchers at the Georgetown University Center for Children and Families estimated before the unwinding began that more than half of children nationwide were covered by Medicaid or CHIP.

The ending of the requirement to preserve coverage has already proved catastrophic for low-income families and children. At least 1.1 million children are believed to have lost Medicaid coverage since the policy ended, according to data from 15 states analyzed by KFF.

Some states have not yet published data breaking down coverage losses by age, giving researchers a limited view of the toll on children.

Children have higher, or more generous, eligibility limits for enrollment in Medicaid and CHIP, and so they were expected to remain on the rolls in greater numbers. Public health experts have feared for weeks that the coverage losses were the result of errors by state Medicaid agencies.

Joan Alker, the executive director of the Georgetown center, said that children are on average eligible up to 2.5 times the federal poverty level through Medicaid or CHIP. When they lose coverage, she added, there is often nowhere else to look for health insurance.

“Children are not expensive to cover, but they’re regular utilizers of care,” she said. “They frequently have ear infections, asthma, things that are very treatable but require them to have access to care.” Gaps in coverage, Ms. Alker added, can be life-threatening.

The coverage losses among children are dominated by Texas, a state that has not expanded its Medicaid program under the Affordable Care Act and hosts an enormous population of Medicaid-insured kids.

Over 600,000 people in Texas have lost Medicaid coverage during the unwinding — by far the highest total of any state.

In Kansas, over half of the Medicaid beneficiaries losing coverage are children, according to KFF. Kate Gramlich, the project manager of Cover Kansas, a group that helps people in the state enroll in health plans, said that Medicaid had become increasingly important to low-income earners in rural areas.

“The jobs are either lacking or don’t pay a living wage,” she said. “A lot of parents are depending on Medicaid in Kansas to have any sort of health benefits for their kids.”

Health care advocates in the state, Ms. Gramlich said, had been pushing Medicaid officials to use automatic eligibility checks during the unwinding process. “We hadn’t considered the potential downfalls,” she said.