Policy Initiatives:

The Cost of Good Intentions:
The Harm of Delaying the Disenrollment of Medicaid Ineligibles

Taxpayers should not be sending payments to health insurance companies

for enrollees who are not eligible.

State-by-State Redetermination Estimates

The following dropdowns link to shareable flyers for each state, showing key stats about the cost of delaying redeterminations while clarifying that eligible enrollees are protected.

Key Takeaways

  1. As a result of federal and state COVID policies, there were roughly 18 million ineligible Medicaid enrollees on the program as of April 1, 2023, at an annualized cost of more than $80 billion. Paying for ineligible enrollees pulls resources away from other public priorities and primarily benefits health insurance companies that administer Medicaid.
  2. States could have begun removing ineligible enrollees in April. Some states started the redetermination process early and are efficiently processing removals of ineligible enrollees, but other states are acting slowly and will waste resources on Medicaid coverage for individuals who have moved out of state, have private insurance, have died, or earn too much income.
  3. Total Medicaid savings would be $41 billion and state savings would be $12 billion if all states pursued an efficient redetermination process.
  4. There are significant protections for enrollees mistakenly disenrolled, including three-month retroactive eligibility, hospital presumptive eligibility, and a robust appeals process.

Three actions

States could have taken three actions to protect limited resources for eligible Medicaid recipients or for other purposes:

  1. Prioritize those most likely to be ineligible: reviewing eligibility prior to the unwinding period to initiate redeterminations for those most likely to be ineligible,
  2. Move up the start date: beginning redeterminations earlier, and
  3. Check eligibility in bigger batches: processing a greater number of redeterminations each month.
Since about two-thirds of Medicaid is financed by the federal government, such actions would also reduce wasteful federal spending and lower the deficit.

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Paragon Health Institute (PHI) is a non-partisan, not-for-profit policy research institute. Any views, beliefs, or opinions expressed by PHI’s Public Advisors are those of its Advisors and do not necessarily reflect the official policies or positions of PHI or its employees. Any views, beliefs, or opinions expressed by PHI or its employees belong solely to PHI and do not necessarily reflect those of PHI’s Public Advisors.