Thomas Metthe/The Arkansas Democrat-Gazette via AP
Arkansas Gov. Sarah Huckabee Sanders, left, and Kristi Putnam, secretary of the Arkansas Department of Human Services, announce plans to implement work requirements for the state’s Medicaid expansion program, Februrary 15, 2023, in Little Rock, Arkansas.
During the pandemic, the federal government temporarily forbade states from kicking people off their Medicaid rolls, and provided extra funding to cover the expense. By late 2022, enrollment had indeed ballooned by 21 million, or nearly 30 percent.
But that prohibition ended in April this year, and sure enough people are now being kicked off the coverage by the hundreds of thousands, as my colleague David Dayen recently pointed out. The most recent estimate comes from David A. Lieb and Andrew DeMillo at the Associated Press this week, and they find that over one million people have lost coverage. The reason: “Most got dropped for not filling out paperwork.”
It’s a lesson in the downsides of Medicaid’s federalized and means-tested structure.
States design and operate Medicaid within federal guidelines, and this gives conservative states run by vicious ideologues like Ron DeSantis or Sarah Huckabee Sanders wide latitude to kick people off the program intentionally or with deliberate incompetence. Per AP, Florida alone “has dropped several hundred thousand people, by far the most among states.” The other largest enrollment declines are seen almost entirely in red states like Arkansas, Idaho, Oklahoma, and West Virginia.
This problem is made worse by Medicaid’s complex eligibility requirements, which include income and asset tests that vary based on the age and status of the enrollee, as well as across states. Most enrollees have a vague at best understanding of the rules, or when and how to file the necessary paperwork, or are now learning about these draconian strictures. One diabetic retiree in Pittsburgh learned that he would have to get rid of $60,000 in his retirement savings or lose coverage, requiring him to pay $700 per month for insulin out of pocket.
Medicaid has been largely privatized over the years: Some 72 percent of enrollees are now in “managed care organizations” run by private companies. That provides a theoretical incentive for those companies to get enrollment as high as possible so they can make more money. But as we’ve seen with the student loan servicers debacle, government contractors are just as prone to Kafkaesque bureaucratic errors as any government agency. (One of them, Maximus, contracts for both student loan servicing and Medicaid eligibility determination in 13 states.)
One easy idea to reduce eligibility mistakes would be to impose “maintenance of effort” rules on companies or states such that if they kick too many people off erroneously, the companies get booted off Medicaid themselves, or the state gets financially penalized.
But a better idea would be to federalize the program entirely, and ease up on the eligibility rules. Roll Medicaid and Medicare into one program (thus removing control from merciless red-state governors) and loosen up income and asset tests (especially for retirees). Make enrollment happen automatically as much as possible, like for anyone under the age of 26 or for anyone on Social Security Disability Insurance. Best of all would be to put every American onto the program for life, thus making it impossible to ever lose coverage.
