Medicaid Unwinding Leads to Churn, Backlogs, and Delayed Services in Many States
By Suzanne Wikle
Medicaid “unwinding” is a process by which states are returning to normal operations after pandemic-era protections have ended. But as we saw in 2023, and will likely continue to see in 2024, this has led to more than 12 million people being disenrolled from Medicaid. Coverage loss is a tragic reality for those who rely on Medicaid to meet their health needs, but there are also ripple effects. State systems and employees are overwhelmed by the magnitude of the work involved, and in some states this is causing application backlogs and delayed or interrupted access to both Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
All states have experienced high work volumes due to Medicaid unwinding and the sheer number of Medicaid renewals that must be completed. In the states with the greatest capacity challenges, significant consequences of unwinding are starting to appear:
Medicaid churn. When someone loses coverage, reapplies, and re-enrolls, they “churn” back onto Medicaid. Because so many Medicaid disenrollments are procedural rather than due to a finding of ineligibility, it’s likely that many of those losing coverage are still eligible for Medicaid. And after people learn they have lost coverage they are likely to reapply. Some states are even publishing data on churn: in Louisiana, more than 60,000 people churned back onto Medicaid in four months, and in Virginia, 53,538 people have churned back on to Medicaid, or 34 percent of all procedural disenrollments to date. Churning is bad for people who experience a lapse in health insurance, but the increased paperwork due to re-applications also places stress on state systems and employees that are already struggling to keep up with renewal and application volume.
Medicaid backlogs. In the monthly data reports states send to the Centers for Medicare and Medicaid Services (CMS) during unwinding, one metric being tracked is the number of unprocessed renewals. In many states this number has been increasing for months, and some states are also seeing a backlog of applications. When someone’s Medicaid renewal is not processed on time they should be kept enrolled without an interruption in coverage. Application backlogs mean people have delayed access to Medicaid, potentially going without needed medical care. Several states have a backlog of tens of thousands of renewals.
The only effective ways to address backlogs are to prevent them from developing and, if they do, spend a lot of time and resources working through the backlog. States can prevent backlogs by ensuring adequate resources up front to handle the volume of renewals and applications, but they must also reduce churn. That, of course, means reducing procedural disenrollments. Once a state has a backlog, it takes a great deal of resources to work through those renewals or applications. Often, states shift resources internally to address the backlog; unfortunately, this tactic has negative implications for other human services programs.
Implications for SNAP. In many states the same staff process both Medicaid and SNAP applications and renewals. The magnitude of Medicaid unwinding has stretched this capacity to an extreme, and sometimes to a breaking point. When states reallocate resources to address Medicaid backlogs, applications and recertifications for SNAP can develop a backlog. Unlike with Medicaid, if someone has submitted a SNAP recertification but the state simply hasn’t gotten around to processing it, people lose their SNAP benefits when their certification period ends. This means that when Medicaid backlogs start to build, people’s SNAP benefits are often jeopardized.
This is a vicious cycle. High procedural denials lead to re-applications and churn, which contributes to backlogs, which overwhelms state capacities and risks people’s access to other essential supports.
But there are ways to avoid or correct this cycle, including:
- More upfront resources to build state capacity. Namely, ensuring adequate staffing to handle the volume of applications and renewals the state receives.
- Greater efficiency in program operations. For example, taking steps to reduce procedural disenrollments, including maximizing ex parte renewals, texting and other outreach, and using data from other programs (such as income information from SNAP). Other options include pursuing longer continuous coverage provisions and using express lane eligibility for kids, where kids’ enrollment in certain nutrition programs makes them automatically eligible for Medicaid.
- Continued federal oversight and guidance. CMS has been heavily engaged in states’ unwinding efforts, helping states troubleshoot system issues and stepping in to require some people be re-enrolled after a common error was identified. CMS recently announced that options available to help states during unwinding will continue through at least the end of 2024. Holding states accountable as allowed, such as with application timeliness, will help ensure states are doing everything they can to avoid or reduce backlogs and help people access support as quickly as possible.