Half a million who lost Medicaid due to state errors regained coverage, officials say

The Biden administration on Thursday announced it had reinstated healthcare coverage for about half a million children and families who had been erroneously dis-enrolled during the unwinding of expanded Medicaid eligibility.

During the COVID-19 pandemic, millions remained on Medicaid and the Children's Health Insurance Program (CHIP) thanks to the continuous enrollment provision that was included in the Families First Coronavirus Response Act. This required continuous enrollment until the end of the COVID-19 public health emergency, which happened in May.

In the months that have followed, thousands who had been on federal health plans have been dis-enrolled, often even while they are eligible to continue receiving coverage. For many people, dis-enrollment occurs due to administrative churn, where clerical errors or missing information leads to loss of coverage.

For others, the continuous enrollment provision lead to them going years without having to go through the re-enrollment process. As a result, they do not know how to remain enrolled.

The Centers for Medicare and Medicaid Services directed about a dozen states over the summer to pause their dis-enrollment processes over concerns of how many eligible people were losing coverage.

According to the Department of Health and Human Services (HHS), a "systems issue" identified in 30 states so far had caused the incorrect dis-enrollment of almost 500,000 children and other individuals, but the issue is now being addressed to allow coverage to be regained.

The problem had to do with automatic renewals, according to the agency, which relies on the use of information like state wage data to determine if someone is still eligible. The 30 states that reported issues were apparently not auto-renewing eligibility at the individual level, meaning children or households in which members have differing levels of eligibility were impacted.

Federal rules require that eligibility be determined for individuals regardless of whether someone else in their household isn't eligible.

“Thanks to swift action by HHS, nearly half a million individuals, including children, will have their coverage reinstated, and many more will be protected going forward. HHS is committed to making sure people have access to affordable, quality health insurance – whether that’s through Medicare, Medicaid, the Marketplace, or their employer,” HHS Secretary Xavier Becerra said in a statement.