Oregon Will Start Purging 200,000 From Medicaid Rolls Next Summer

Oregon expects to boot roughly 200,000 people from its Medicaid rolls next year, once the pandemic is officially deemed over and people who are ineligible for the insurance under traditional – but temporarily waived -- restrictions are re-evaluated and dropped, the PDF iconlatest state estimates show.

Under a March 2020 federal emergency law, Medicaid members in most states, including Oregon, were allowed to stay on the taxpayer-funded health care insurance even if their incomes rose above federal limits or they otherwise became ineligible. That pandemic-driven protection is expected to stay in place until January 2022.

The state is already working on a process, to be implemented next spring, for re-assessing members of the Oregon Health Plan – the state’s version of Medicaid -- and bumping those who exceed the income limits.

After the anticipated January 2022 expiration of the emergency law, the Oregon Health Authority will take about four months to reformat its Medicaid eligibility system back to the pre-pandemic rules, and need a further two-three months to determine which members no longer qualify for the insurance, according to the latest forecast. By July 31, 2022, the agency expects to begin dropping people who are no longer eligible.

The vast majority of those to be dropped will likely be adults, but thousands of children whose family incomes make them no longer eligible for Medicaid will also be dropped, according to the forecast.

The process, required by federal law, will be a massive and rapid shake-up for a system that has proven to be a vital safety net during the pandemic. It picked up tens of thousands of Oregonians who abruptly lost their jobs and their accompanying health insurance. Now at 1.31 million, enrollment is up 22% since the start of the pandemic.

The forecast shows Oregon’s Medicaid rolls growing to 1.4 million by next summer, then dropping by about 200,000 as the evaluation process removes people.

“After the (public health emergency) is over, it will take some time to finish processing the (Medicaid) applications from during the (public health emergency), make changes to the eligibility system, and then start processing applications and redeterminations under the (old) rules. As cases are reviewed, we expect a sharp initial drop,” said Lori Coyner, who was Oregon’s Medicaid director until the end of last month, when she switched to a new state Medicaid role.

But even after ineligible people are removed from Oregon’s Medicaid rolls, the plan will cover 1.2 million people, which is over 100,000 more than before the pandemic, according to the forecast. That’s due to a number of factors. For example, many Oregonians still have not regained their jobs and commercial health insurance, and unemployment remains high compared to before the pandemic. Plus, people who for the first time signed up for Medicaid during the pandemic now realize what a good financial deal it is and may try to get back on it. The insurance is essentially free to the member, with no premiums, deductibles or copays.

“Once people are familiar with Medicaid, even if they leave, they are more likely to return at a later date if they find themselves eligible once more,” Coyner said.

Federal Law Promises Extra Money

In Oregon, as in many states, Medicaid enrollment ballooned during the pandemic. The main reason is a federal law – passed by Congress in March 2020 and signed into law by then-President Donald Trump -- that gives states extra Medicaid money for the duration of the pandemic on the condition that they let members stay on the insurance even if their income tops traditional federally-imposed limits.

Huge amounts of money are at issue. It costs the state, in combined federal and state money, about $6,400 to cover a Medicaid member for a year. Typically the federal government pays about 75%, and the state the rest. That’s about $7 billion a year in federal money, plus, under the March 2020 law, an estimated $307 million extra in 2020 and $580 million extra this calendar year. State officials have said the extra federal money has been enough so far to cover the extra enrollment, but that’s less certain for the coming 12 months.Under the temporary law, Oregonians can join Medicaid based on “self-attestation” of income, and the state does not check whether the figures are accurate. Also, even if members are found ineligible, for example because income exceeded the limits, they are kept in the program.

Nationally, Medicaid rolls swelled to 80.5 million earlier this year, up from 71.3 million in February 2020, as the pandemic was beginning, according to Kaiser Health News.

The Families First Coronavirus Response Act gives an extra 6.2% in Medicaid money to states in return for them not purging people from the rolls, unless members move out of state, choose to drop the coverage, die or are incarcerated.

Before the pandemic, annual Medicaid enrollment in Oregon fluctuated between 1.07 million and 1.1 million, rising and falling as newly eligible people joined, and people were dropped because higher income or other changed circumstances made them ineligible.

But now, the departures from Medicaid have dwindled to a trickle, while the number of new entries each month has held steady.

“In a nutshell, the growth in the (Oregon) Medicaid caseload is coming from a 75% decrease in exits every month, not from large numbers of new people entering Medicaid,” Coyner said. “With exits down substantially, and new enters essentially flat or down slightly, the caseload grows every month.”

Enrollment Growth Will Continue Into 2022

The growth has taken place in all types of Medicaid: Adult membership under the Affordable Care Act has grown from 350,000 pre-pandemic to over 500,000 now, and is forecast to reach about 600,000 by July 2022. At that point, about 150,000 people will be purged from the rolls, dropping the tally to 450,000 by late 2022, the forecast says.

Children’s Medicaid enrollment has grown steadily from a pre-pandemic level of 300,000, and is projected to hit 340,000 by July 2022. Then, as the rolls are purged, it is forecast to drop back to pre-pandemic levels. Separately, enrollment in the Medicaid CHIP – Children’s Health Insurance Program – will reach 110,000 by next July, up from 90,000 pre-pandemic, then drop back to pre-pandemic levels with the purging.

Just how the funding will pan out next year is unclear. State officials expect the extra federal money to run through the end of next March. At some point next year, the funding system will return to its pre-pandemic funding model. Whether or when Medicaid enrollment in Oregon will drop to its pre-pandemic level is anyone’s guess.

Oregon economists predict a robust recovery, which may be a harbinger of fewer people on Medicaid.

“Hopefully, a strong economy and maybe an increase in wages will decrease the number of Oregonians below or near the poverty line. If that happens, then, in the long run, the number of people on Medicaid will also decline, taking any potential population growth into account,” Coyner said.

But that may not happen for quite a while.

Pre-pandemic, in February 2020, Oregon’s economy was the strongest it had been in four decades, with a 3.3% jobless rate and 69,000 unemployed. In the throes of the pandemic, the jobless rate peaked at 13%, with 292,000 jobless. Now it is down to 5.9%, with 118,000 jobless, according to the Oregon Employment Department.

“Total employment in Oregon will surpass pre-pandemic levels in late 2022 with the unemployment rate returning to 4 percent in 2023,” says the latest forecast from the Oregon Office of Economic Analysis.

You can reach Christian Wihtol at [email protected].

 

 

News source: 
This article is for premium subscribers. If you are one, please sign in below.
You can see two more premium stories for free. To subscribe, click here. We depend on premium subscriptions to survive, and they are tax deductible.