Coloradans losing Medicaid at pre-pandemic rate after feds’ pause lifted

Halfway through the process of determining who still qualifies for Medicaid coverage in Colorado, recipients are getting kicked off at about the same rate they were before the pandemic.

During the COVID-19 public health emergency, states received extra federal money if they kept almost everyone already in Medicaid on their rolls. Under normal circumstances, the state would run annual checks to determine whether recipients still qualified based on their income, disabilities, pregnancy status, or other factors.

The Colorado Department of Health Care Policy and Financing sent out the first renewal notices in March and began reassessing members’ eligibility in May. Just over 1 million households’ coverage will come due for review by April 2024.

At the end of October, about 54% of people who had come up for renewal in the previous six months kept their coverage, which was comparable to the average of 57% in 2018 and 2019. That comes out to about 434,000 people so far who have retained coverage and 353,600 who no longer have it.

The percentage of people who kept coverage may rise, though, because members have a 90-day grace period to turn in their renewal packets, said Kim Bimestefer, executive director of the Colorado Department of Health Care Policy and Financing. If people reapply within that period, Medicaid will cover bills incurred while they were accidentally uninsured.

Typically, some people cycle on and off Medicaid as their household finances change over time, Bimestefer said. About 20% of members lose coverage and then return to Medicaid within two years, even in typical times, she said. Even as the department has reviewed existing members’ eligibility, about 21,500 people have joined each month since May.

“It’s natural for people to come on and off Medicaid,” she said. “We’re a safety net.”

The mix of reasons why people lost coverage differed from the pre-pandemic period, though. In the two years before the pandemic, about 29% of members lost coverage because they were no longer eligible, and 12% fell off the rolls because they didn’t return paperwork, or for other procedural reasons. In the first six months of redetermination, 15% of those reviewed were ineligible and 25% lost coverage for other reasons. (The percentages don’t add up to 100 because a small number of applications are still pending.)

The department is trying to sort out how many people didn’t return their renewal packets because they’ve found jobs and don’t need Medicaid coverage, and how many got lost somewhere in the process, Bimestefer said. People who’ve gotten jobs with health insurance should call their county human services office to let them know, so they can focus their efforts on those who need help maintaining their coverage, she said.

“If everybody turned in their data, that procedural (termination) number would go way down,” she said.

The state doesn’t have full information about how many people who lost Medicaid coverage gained insurance from another source or became uninsured. Connect for Health Colorado reported that 6,828 people, or about 6% of those who lost coverage, purchased an individual insurance plan after receiving a referral to the marketplace.

The process of restarting eligibility checks has been bumpy. An analysis in November projected about 30 million people nationwide could lose coverage, which is about twice the number the Biden administration initially expected to fall off. In September, the federal Centers for Medicare and Medicaid Services called out more than half the states, including Colorado, for dropping some children who still qualified. In some red states, advocates have accused their governments of making the process deliberately confusing, to try to discourage recipients from completing the process.

Colorado hasn’t tried to deter recipients from maintaining coverage, but communication problems that existed before the end of the public health emergency still create barriers to keeping as many people enrolled as possible, said Bethany Pray, interim deputy director of the Colorado Center on Law and Policy. The state and counties work with outdated computer systems that don’t share data well, requiring employees to manually send information and introducing more opportunities for something to go wrong, she said.

“People are getting lost in the cracks,” she said.

The contents of messages also pose a problem, Pray said. An audit earlier this year that took a random sample of 80 letters sent by Medicaid to recipients found 90% had at least one problem, such as confusing language or contradictory information. The auditers took their sample from January and February, before notices about proving eligibility started to hit the mail, but noted that recipients who had received poor-quality information or an excessive number of letters from Medicaid might simply ignore the notice that they need to prove their eligibility.