Facing the facts: Advocates present to the JBC on glitch-plagued PHE Unwind

Facing the facts: Advocates present to the JBC on glitch-plagued PHE Unwind

by Bethany Pray, Esq., Anthony Lux and Katherine Wallat, Esq.| Jul 5, 2024

Community Insight, COVID-19, Equity work, Family Economic Security, Health, News, Research and Policy Analysis

On June 20 the Colorado Health Policy Coalition (CHPC) brought a panel of speakers to the Joint Budget Committee (JBC) to discuss the Public Health Emergency (PHE) Unwind. The PHE Unwind is the process all states have gone through to re-examine eligibility of all Medicaid enrollees. Aiming to underscore the urgency of the situation, CCLP's Bethany Pray and other coalition members testified on the numerous challenges for Colorado residents, the providers who rely on Medicaid reimbursement to provide care, and the counties who process eligibility.

Colorado has nearly[i] made it through the process of re-examining eligibility for the almost 1.8 million Coloradans who were enrolled in Medicaid during the COVID-19 PHE. Health First Colorado, our Medicaid program, was a lifeline for over 30 percent of Colorado residents, helping Colorado weather COVID-19 and connecting people to low- or no-cost behavioral health care, vaccinations, primary care, medications, and more.

The PHE Unwind has been painful, marked by processing backlogs, inaccurate notices, unprecedentedly high rates of denials, and soaring application rates. Those application rates were largely driven by people who were dropped from coverage despite still meeting program requirements, who were then forced to scramble to regain coverage. While Colorado's Medicaid coverage policies are more generous than those of many states, endemic operational problems and inefficiencies have prevented those policies from having the intended impact. As of May 2024, Colorado was second in the nation in the percentage of enrollees terminated from coverage.

The PHE Unwind portion of the JBC meeting opened with a presentation by Kim Bimestefer, the Executive Director of the Department of Health Care Policy and Financing (HCPF). HCPF is the state agency responsible for administering Medicaid. Following questions by members of the JBC, CCLP's Bethany Pray presented on the data around the PHE Unwind and the state's inefficient processes. She was followed by Megan Bowser, a parent of a child with disabilities and the incoming Executive Director of Family Voices Colorado, explaining the enrollee perspective; Laura Luzietti, a pediatrician and Executive Director of Every Child Pediatrics on the impact on providers; and Jamie Ulrich, Human Services Director of Weld County, bringing county insights.

Ms. Pray's testimony affirmed that all stakeholder groups, including residents, providers, and county employees, are hampered by old technology and overly complex processes. She urged policy makers -- the legislature and administration - to take a clear-eyed look at the dysfunction of our Medicaid eligibility system.

CCLP believes it is imperative that the state of Colorado find a path to a more efficient Medicaid system that can keep eligible people enrolled, support a robust provider network, and allow counties to function smoothly. What we don't need is a positive spin on the situation, which merely obscures the truth.

More detail on CCLP's presentation and the sources behind it can be found in this outline of CCLP talking points. Because time was short - with just 30 minutes available for the entire CHPC panel - there was little chance to debunk misleading information offered by the Department. We offer more detail on those points in the Fact Check! below. And for a deeper analysis of data regarding the minimum wage and Medicaid eligibility, be sure to check out CCLP's new Issue Brief: Medicaid Eligibility and Wages.

Fact Check!

#1: There is no basis to believe that a large number of people have lost coverage because they transitioned to employer-based coverage.

• HCPF has publicly acknowledged that they have no insight into what has happened to 42 percent of those who lost coverage. Up to 300,000 Coloradans are unaccounted for.
• Primary care and behavioral health providers report sharply increased numbers of uninsured people.
• There is strong evidence for errors in eligibility determinations. For example, a quarter of those terminated from Medicaid due to income who attempted to enroll in a commercial plan through Connect for Health, our state exchange, were instead found still eligible for Medicaid.
• Unemployment has increased during the PHE Unwind (see below!)

#2: There is no basis for the claim that unemployment rates account for the differential between state disenrollment rates or that Colorado's employment rate "has been stronger throughout the … PHE Unwind."

• In fact, Colorado's unemployment rate rose slowly but steadily through the PHE Unwind, from 3.1% in May 2023 to 3.8% in May 2024.
• Colorado currently ranks 38^th for its unemployment rate. Unemployment is higher in Colorado than in most other states.
• HCPF cites outdated February 2020 information when talking about unemployment.
• In CCLP's analysis, unemployment rates do not correlate with Medicaid enrollment, though that might seem logical. In fact, we see evidence that increasing unemployment rates are correlated with declining Medicaid enrollment across the country since the start of the PHE. While this may seem counterintuitive, the implications is that other factors are behind the declines in Medicaid enrollment we've seen in states across the country.

#3: There is no basis for the claim that Colorado's higher minimum wage is the cause of Colorado's high termination rate.

• In CCLP's analysis, increases in Colorado's minimum wage since 2019 have had minimal impact on the size of the Medicaid-eligible population.
• In many cases, single-adult and two-adult households working 35 hours at the minimum wage were not eligible for Medicaid in 2019. If the minimum wage had any effects on disenrollment from higher wages, that impact would have occurred well before the start of the PHE.
• In CCLP's analysis, there was no clear correlation between the minimum wage level of a state and Medicaid rolls, though that might seem logical. (See CCLP's Issue Brief: Medicaid Eligibility and Wages for more.)
  • For example, Maryland's minimum wage exceeds Colorado's, but termination rates were much lower.
• According to KFF, states that have seen some of the highest rates of Medicaid disenrollment since the start of the PHE have minimum wages of $7.25/hour, the federal minimum - if Colorado's higher minimum wage is driving our high disenrollment rates, why do we see similarly high rates in states with lower minimum wages?

#4: Comparisons between denial rates in May 2024 and rates during the PHE Unwind are misleading.

• Denial rates in May 2024 can't be compared with earlier months because they reflect only terminations for the income-based population. In April 2024, HCPF instituted a policy that kept Coloradans with disabilities (a large group of at least 80,000 people) automatically maintained in Medicaid. (This is because case management system changes during the PHE Unwind resulted in a flood of problems for people with disabilities.) The result is that May 2024 denial rates are not comparable to other months.
• Hundreds of thousands of people have lost coverage since May 2023. If these high rates of disenrollment were to continue, it would take less than a year (May 2025) for Colorado to have zero Medicaid enrollees.
• Even so, as unemployment continued to edge up, over 12,000 people lost coverage in May 2024 for reasons other than voluntary withdrawal.

#5: It is false that our current enrollment is higher than it was pre-pandemic.

• In fact, most counties have enrollment levels below pre-pandemic levels.
• In the aggregate, according to HCPF caseload reports, enrollment in February 2020 was 1,193,435 individuals. By May 2024, 32,319 fewer Coloradans were enrolled.

#6: It is not simply "good news" that people who are eligible but lose Medicaid often return to coverage.

• Such a statement would be equivalent to a statement that moving on and off Medicaid, a concept known as "churn," is good - though it is expensive for counties and damaging to the health of Coloradans.
• HCPF reports that a third of those who lost coverage returned to Medicaid. This suggests that at least a third of the people that are being disenrolled have demonstrated that they should never have been disenrolled in the first place - a clear signal of an ineffective eligibility process, not a sign of good news.
• Our analysis of changes to Medicaid enrollment in states across the country indicates that states who managed to maintain a smaller share of beneficiaries whose coverage was terminated for a procedural or administrative reason also saw a smaller decrease in their Medicaid enrollments.

#7: Returning to the pre-pandemic status quo would not be a positive state of affairs.

• There was a steady loss in Medicaid coverage before the pandemic. Despite the lack of supporting evidence, HCPF attributes that to a strong Colorado economy between 2016 and 2019.
• CCLP's analysis in 2019 attributed some of those losses to administrative burdens, including defective Medicaid communications and the state's returned mail policy.
• The rate of churn in Colorado - eligible people being terminated and having to come back on - was substantial before the unwind.

#8: State policy expansions should have yielded higher enrollment in 2024 than in 2020.

• Since February 2020, more people became eligible for Medicaid because certain policy changes have yielded higher enrollment, including the following:
  • Pregnant Coloradans can keep their coverage for 12 months post-partum, rather than 2 months, as of 2022.
  • More working Coloradans with disabilities are eligible for coverage as of 2022.
  • Enrollment in both categories has more than doubled between February 2020 and May 2024, adding 24,314 to the Medicaid rolls.
• Meanwhile, enrollment for income-eligible children has dipped by more than 40,000 individuals. Enrollment for very low-income parents - those up to just 68% of the federal poverty level - has dropped by almost 20,000 people.
• Economic mobility is not a likely cause: It is more common in the US, especially for Black and Latinx residents, to move down the economic ladder than it is to move up from lower income tiers.

#9: State policies, procedures, and administrative factors appear to have had a stronger impact than economic factors on Medicaid enrollment.

• CCLP's analysis of changes in states' Medicaid enrollment suggests there is a correlation between states who took advantage of more flexibilities offered by CMS, the federal agency (in the form of waivers), and lower disenrollment rates.
  • This point echoes findings of the Urban Institute based on data through November 2023 (though our analysis covered a longer period through April 2024).
• CCLP found that states with fewer terminations due to procedural or administrative reasons have higher Medicaid enrollment have seen overall less loss of coverage since the start of the PHE.
• These variables had much stronger statistical significance than economic factors we looked at, including unemployment rates and minimum wages.
• Unemployment has been rising in most states, while Medicaid enrollment has been dropping as states unwind. As a result, unemployment is not a useful indicator of expected enrollment-contrary to what HCPF has been suggesting.

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[i] The Unwind is not technically complete because of an April 2024 pause on terminations for people with disabilities.

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