Medicaid is crucial to the health and well-being of 1.4 million Minnesotans

It is difficult to overstate the importance of Medicaid for low-income people across the country, particularly in states like Minnesota that fully leverage coverage and benefit options under the federal/state program.

About a quarter of Minnesotans — 1.4 million people — are enrolled in Medicaid, including over 650,000 children, 125,000 people with disabilities and about 78,000 seniors. For seniors and people with disabilities, Medicaid often pays for long-term care in addition to basic health care. 

When the COVID-19 pandemic hit in early 2020, one of the most important actions the federal government took was to ensure no one lost their health care coverage under Medicaid. (In Minnesota we call our program Medical Assistance, but we’ll just call it by its national name, Medicaid.) This was accomplished by suspending the annual renewal process normally required to continue Medicaid coverage. This change allowed people who rely on Medicaid to maintain health care coverage during the COVID-19 health crisis and avoid in-person interactions often required to keep Medicaid coverage. 

Late last year, the federal government announced it was ending the public health emergency, and that states would be required to restart annual renewals. While the announcement was expected, it creates a significant risk that people may lose their Medicaid coverage as the renewals process restarts. (The same is true of our public health program for the working poor, known as MinnesotaCare.)

With the pandemic policies ending, the challenge for states is to ensure everyone eligible for Medicaid retains their coverage. 

Before it was suspended for the pandemic, the annual Medicaid renewal process was a standard part of program operations. Medicaid enrollees are required to essentially re-apply for Medicaid each year. But the process has never been simple. Navigating this process has always been challenging for families and for state and county workers, and every month some people lose coverage — sometimes for a month or two, sometimes longer.

Restarting the process after a three-year hiatus only compounds these challenges. The number of Medicaid enrollees in Minnesota has increased by about 300,000 people, and many current enrollees have never been through the process. They don’t know what to expect or what steps they need to take. In addition, many people have moved in the past three years. Why does that matter? Because the process still relies heavily on paper and U.S. mail.

There are two ways people can lose health care coverage. The first is if administators determine the person is no longer eligible, perhaps because they make too much money. This is expected — it is the very reason for the policy: To ensure, once a year, that people remain eligible for Medicaid coverage. 

The greater concern is the second way people lose coverage: They get lost in the renewal process. There are numerous reasons this might happen. They didn’t receive notice about the need to renew. They didn’t follow through with requested information, or missed a deadline to do so. Maybe the information they provided was incomplete. Maybe there was a miscommunication between the human services worker and the Medicaid applicant and what was needed and when. Or, the U.S. Postal Service lost the correspondence.  

In the end, we don’t know if they are eligible for continued coverage or not. Regardless, they lose coverage. 

The compounding challenges of restarting renewals create even more risk than pre-pandemic, but the fact is that enrollment churn and loss of coverage are a feature of public health care programs and other public assistance programs. These programs have many reporting requirements and other hoops that people must go through to get or keep their health care. While often well-intended as a guard against fraud, or thought to serve some larger policy goal (think: work requirements, drug testing), these policies always produce a decrease in program enrollment.

Simpler eligibility policies are a good goal, and some progress has been made in that direction. But some policies and processes are needed for basic program integrity and to protect public funds, and there is inherent risk in eligibility processes because it involves back and forth communication between the enrollee and their worker. 

For health care programs, a larger policy consideration is how annual renewals and other policies impact continuity of health care coverage. Continuity in health care coverage is an important policy goal in and of itself, and frequent breaks in coverage caused by eligibility processes create needless gaps in coverage for vulnerable populations. A person living with diabetes, for instance, could face catastrophe without consistent care. 

Improving continuity of coverage and limiting gaps in coverage should be addressed in two ways: policy changes and process improvements. Efforts in both areas are underway. 

Gov. Tim Walz’s budget proposes to improve continuity in Medicaid coverage for one of the most important populations: children. His budget would provide continuous coverage for all kids up to age six and continuous coverage for 12 months for all children older than six. Sen. Melissa Wiklund, DFL-Bloomington, and Rep. Mohamud Noor, DFL-Minneapolis, have sponsored bills with the same intent. In a similar vein, Walz is also proposing changes to other public assistance programs that would help stabilize families and individuals by simplifying reporting requirements. 

These policy proposals recognize that continuity of health care coverage and stability of income are important goals in our efforts to support low-income families. This is a welcome trend; too often policymakers fail to recognize how the detailed administrative rules in public programs can get in the way of more important policy goals. 

The eligibility process won’t go away, however, and process improvements must also be part of the solution. 

We should not be relying on paper processes in the 21st century.

Implementation of the MNbenefits app in late 2021 set a pathway for using new technologies to make it easier for people to apply for benefits. Walz’s budget proposes to build on that success as part of a broad effort he’s calling the Service Delivery Transformation in the Department of Human Services, including improvements to existing IT systems that support eligibility and greater use of text and other electronic means of communication with enrollees.

For the present challenge, DHS has put a plan in place that emphasizes frequent and multi-modal communication with enrollees; ongoing support of counties; and partnerships with organizations that work with people needing health care, referred to as navigators. This is a good plan. The challenge will be in the implementation. 

It will be an “all-hands-on-deck” year for DHS, counties, navigators and other partners to ensure continuity in health care coverage for a quarter of our fellow Minnesotans.