Looming end of federal pandemic emergency threatens to shake Texas’ Medicaid safety net, advocates say

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At the start of the pandemic, when family earners lost their jobs and access to health care, the federal government relaxed Medicaid rules to allow more people to stay on the national health insurance program.

But now, as many as 1.3 million Texans, mainly children, could start losing their government health coverage when the federally declared pandemic emergency ends, expected by the end of this year — touching off concerns that Texas’ understaffed safety net system is woefully unprepared for them.

The emergency declaration has kept states from dropping people from Medicaid rolls as they endured financial instability caused by COVID-19. The result? The number of Texans on Medicaid has grown by some 20% in the past two years.

Now, health officials and researchers estimate that between 880,000 and 1.3 million Texans are likely ineligible for Medicaid but still on the rolls because of that rule. The state’s plan to accelerate their removal faster than required by the federal government — and with limited resources — has advocates worried that millions more could lose coverage due to administrative glitches even if they do qualify.

“We already have a huge uninsured issue in this state, and this just could be a perfect storm,” said Jana Eubank, executive director of the Texas Association of Community Health Centers, a network of local centers that gives health care to 1.6 million Texans, nearly half of whom are uninsured. “We’re busting at the seams. … The last thing we need are more uninsured people.”

Once the so-called Pandemic Health Emergency (PHE) ends, the work begins to comb through the applications of some 3.7 million Texas recipients whose eligibility has not been reviewed since they enrolled and find those who are still qualified to keep their coverage.

National child welfare experts say it’s critical that the states bring back their pandemic-era guidelines in a way that is compassionate, collaborative and not driven by political desires to kick as many people off of Medicaid as possible.

Texas has the nation’s highest rate of uninsured people and is one of 12 states that has refused to expand Medicaid to include more people as part of the Affordable Care Act. Expanding Medicaid could add as many as 1.3 million Texans to the rolls, researchers say.

If they can’t get it right, access to health care for the state’s most vulnerable residents — pregnant women, children, older adults and disabled adults — is at stake, said Tricia Brooks, research professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.

“However this turns out, it’s really the state’s responsibility,” Brooks said. “How the state approaches the unwinding of the continuous coverage protection, how long it takes the process and the procedures put in place. That is where the rubber meets the road.”

In March 2020, Congress passed the Families First Coronavirus Response Act, which allowed states a temporary 6.2% increase in federal Medicaid funding as long as they keep everyone enrolled in Medicaid until after the PHE ends.

The idea was to prevent people from losing coverage at a time when record numbers of people were losing jobs, employer health insurance and homes all while facing a huge public health threat.

In other words, once someone was accepted into Medicaid, they could remain enrolled until the public health emergency declaration was officially over.

As Texans lost their jobs — along with their employer insurance or the ability to pay out of pocket — enrollment in Texas Medicaid programs jumped from 3.8 million in February 2020, a number that had been dropping in recent years, to about 5.1 million in December 2021, according to the Texas Health and Human Services Commission.

Enrollment in Texas grew faster than the national average, with a 20% increase in enrollees compared to a 16% national average, according to the Georgetown University Center for Children and Families.

The number of children on Medicaid here increased by 26%, while the national increase averaged 21%.

Earlier this year, President Joe Biden promised states that they would get 60 days’ notice before he allows it to expire.

The current expiration date is July 15. The deadline for notifying states to prepare for its end was Monday, and it passed without that notice. So while there has been no formal announcement, the current presumption is that the public health emergency will be extended at least until October.

If that happens, states will find out in August whether the PHE will expire in October, and benefits could start ending as early as Nov. 1.

Unwinding the PHE 

Texas is one of just eight states that is planning to dismantle the PHE requirements more quickly than the federal government recommends — in six months instead of a full year.

It’s a move that will save the state in Medicaid costs but can cost Texans critical access to care if it is done too quickly or carelessly, health care professionals say.

“Unwinding (from the PHE) too quickly will result in human and financial costs not only to millions of Texans, but also the state’s safety net, already strained by the pandemic,” reads a letter written to state health officials and signed by 10 Texas health-related groups, including those representing the state’s doctors, hospitals, health insurance plans, pediatricians, community health centers and others.

Texas HHSC, tasked with handling the influx, anticipates a “large volume of work” and “potential strain on the eligibility system” when the process of dismantling the PHE begins, according to plans the agency released in March.

The volume of work involved in the process, state officials say, is comparable to the launching of the massive Affordable Care Act, which overhauled health insurance and delivery systems on a state and national scale.

The ensuing administrative nightmares — hourslong phone wait times to verify passwords or get questions answered, mailed notices sent to out-of-date addresses — are a likelihood that could leave hundreds of thousands who do qualify for Medicaid with a gap in health care coverage while they try to navigate an already complex system.

“Gaps in coverage for children, new mothers, and other vulnerable patients can lead to interruptions in access to medications, therapies, and other medical treatments,” read the letter sent to state officials by the health care groups. “Delayed or skipped treatment often leads to worsening conditions and greater use of high-cost care.”

Critics of the Medicaid program say they believe the state will take the time it needs to effectively make the change back to pre-pandemic era rules without coverage gaps and that it’s necessary to drop unqualified people from the program as fast as possible in order to keep services flowing to those who still need them.

David Balat, a conservative health care expert in Austin, said Texas HHSC has “requested more resources to better help those affected” by the transition as a way to offset the anticipated personnel issues.

“Allowing people who are ineligible for Medicaid to continue to receive benefits hurts the patients who truly deserve to be on the program,” said Balat, who directs the Right on Healthcare initiative at the right-leaning Texas Public Policy Foundation. “Texas can and should make the transition as soft as possible … But if someone is no longer eligible for Medicaid, they should not continue to take critical resources away from those for whom they were intended.”

Asked about whether the state was prepared for the influx of applications and why officials are attempting to do it in a shorter amount of time, officials with the state HHSC offered few details.

“Like many states, Texas is balancing multiple policy, operational and financial priorities in unwinding continuous Medicaid coverage related to the federal public health emergency,” according to an emailed statement from HHSC press officer Kelli Weldon. “Texas HHSC’s estimated timeline for ending continuous Medicaid coverage is based on our projections of workforce capacity and workload. It is important to note that the timeline in our plan is an estimate.”

Medicaid beneficiaries in Texas are primarily children, pregnant women, older adults and people with disabilities who are in or near poverty. The income limits are among the lowest in the country. Childless, able-bodied adults may not qualify under any circumstances in Texas.

Most of those who will lose Medicaid after the PHE ends, state health officials say, are children who have aged out of eligibility or whose household income no longer allows them to qualify, people who were pregnant at the time they qualified but are now not eligible under that rule, or adult recipients who no longer have an eligible dependent child in their household.

Some of those women and children may be eligible for other programs, such as the Children’s Health Insurance Program, Healthy Texas Women or marketplace insurance plans.

Another 280,000 Texans are expected to be able to transition to a different eligibility group within Medicaid.

While the federal government gives states a year to transition recipients, the Texas plan released in March indicates it will be finished by Feb. 1, 2023, processing up to 75% more applications per month than the U.S. Centers for Medicare and Medicaid recommends.

To meet the new demand, the agency plans to temporarily move staffers from other departments to help with the case reviews, conduct job fairs and boost recruiting to fill open positions, adding clerical staff to assist with data entry and interview scheduling and automating some scheduling and other systems.

Officials are also planning to hire temp workers, implement flexible work schedules and reduce onboarding time for new employees by 50%.

A backlog can further complicate an already complex application process that requires documentation and can confuse or intimidate parents, making it difficult for them to apply in the time required of them, Eubank said.

Children, who make up the majority of Medicaid recipients in Texas, are the largest group who will have to be reenrolled by their parents and are likely to qualify again — but they are especially vulnerable to coverage gaps, Eubank said.

“That’s the population we’re really concerned about — the kiddos that are continuing to be eligible but because of infrastructure challenges won’t be reenrolled and will have gaps,” she said. “There are so many things that could create that issue.”

Disclosure: Texas Association of Community Health Centers and Texas Public Policy Foundation have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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