Whenever the public health emergency is officially over, millions of Americans will face a life-threatening reality. It’s called the “Medicaid Cliff” — that point in time when the current pandemic-driven prohibition on states terminating Medicaid coverage will end and more than 80 million Americans will face a paperwork blizzard while trying to keeping their health coverage. Further, more than one in ten will likely no longer be eligible and will need immediate help finding new coverage in the federal health exchanges.
The great tragedy is no one knows. While the lifting of a similar pandemic prohibition on evictions garnered tremendous publicity, awareness of the Medicaid Cliff is not nearly as great, even though its impact will very likely be much greater.
This is not just a hypothetical. Even when benefits transitions are supposed to be automatic and seamless, it never seems to work that way. Just look at the transition to the exchange health plans and premium tax credits that was a part of the Affordable Care Act. Moreover, almost by definition, programs like Medicaid serve beneficiaries who often have limited access to the very resources that help them understand what they need to do, how to do it, and when they need to do it. The underlying reality is that our patchwork of benefits programs, most of them funded at the federal level but administered at the state and local level, are characterized by a wildly disconnected, time consuming, rigid, and often humiliating maze of regulations governing eligibility processes. And when disruptions inevitably occur, the impacts on families living on the edge can be financially devastating.
The Medicaid Cliff is a prime example of what Annie Lowery, writing in The Atlantic, referred to as “the time tax.” In a highly compelling piece, Lowery pointed out the many ways in which “to make sure that our social insurance programs insure us…we work as our own health care administrators. Our own tax professionals. Our own social workers. Our own disability law experts. Our own child support advocates, long term care reps, and public housing officials.” All of this, she says, can be thought of a “time tax” — “a levy of paperwork, aggravation, and mental effort imposed on citizens in exchange for benefits that putatively exist to help them…mediating every American’s relationship with the government and wasting countless precious hours of people’s time.”
We know that the more time consuming and emotionally draining any process, the less people are likely to complete it. In the case of nutrition, health and other programs, this means many families miss out on the benefits for which they qualify. To make matters worse, the “time tax” is regressive; that it is, as Lowery wrote, “worse for individuals who are struggling than for the rich; larger for Black families than white families; harder on the sick than the healthy.”
Considering that Census Bureau data show that 57% of Medicaid beneficiaries are people of color; and half of all non-white children rely on Medicaid for their health care, including 57% of all African American children and 52% of all Latino children, it is not hard to see how impactful the Medicaid cliff could be.The good news is that it need not be this way. There are solutions.
In a paper to be released soon, Families, USA, the leading advocacy organization for beneficiaries, will promote a concept called “No Wrong Door,” under which applicants for one health insurance program will automatically be enrolled in other programs for which they qualify, at lower cost to themselves. Many families who face the “cliff” because they are no longer eligible for Medicaid will almost certainly be eligible for no-cost insurance through the exchanges. But absent aggressive outreach and education, as well as the advent of contemporary tools such as text messaging, front end apps and more, many will also find themselves without insurance — at great cost to them and to the health care system.
For context, consider what happened when the last administration allowed terminations from the Child Health Insurance Program (CHIP) to begin again. In Utah, 40 percent of the children who had previously been on CHIP lost their coverage; and in 90 percent of the cases the cause for termination had nothing to do with eligibility. Rather, no information had been submitted or was “available.” In other words, the outreach, education, and support to beneficiaries, most of whom are struggling daily to get by, simply wasn’t available. Imagine when the same dynamic begins to impact 80 million Americans currently on Medicaid.
This concept was actually envisioned and included in the Affordable Care Act but never realized. Also unrealized are ACA requirements that every state must connect to various specific data sources, including SNAP and federal tax information — to determine eligibility whenever possible. Tapping into these two data sources alone could prevent most Medicaid families from falling off the cliff.
Fortunately, the Biden administration has already launched an important effort to tackle one of the most significant root causes of the “time tax” and other challenges associated with a range of benefits programs: the unwillingness or inability of agencies and programs to share data. One of the earliest Executive Orders (EOs) of the Administration requires agencies to assess how and where interagency data sharing could improve service, efficiency and accuracy in public benefits programs. To date, data sharing across agencies, let alone across levels of government, has been less than rare. But in the aftermath of the EO, the ice has begun to melt.
In fact, with data showing that some 90 percent of children who are eligible for SNAP benefits come from households that are also Medicaid-eligible, there is now a long overdue effort underway in which data on SNAP program families will be shared with the Center for Medicaid Services and used to provide automatic, at least temporary extensions of Medicaid when the termination moratorium ends. This, coupled with the “no wrong door” strategy and automatic renewals whenever data matches show a high likelihood of continued eligibility, could pay huge dividends for a relatively modest investment.
In recent days, this issue became a part of Congressional debates over President Biden’s Build Back Better plan. The House proposal lets states start terminating Medicaid coverage, beginning on April 1, 2022, providing predictability that enables state and federal planning. Requiring all states to maximize data-based renewals will be essential to preventing millions of vulnerable people from losing coverage when this process begins. In addition, the legislation requires states to share data with the state and federal exchanges to expedite re-enrollment in exchange health plans.
Nearly two years of a pandemic have starkly illuminated the many gaps and challenges accessing the full range of federal benefits programs. As we draw nearer to the end of the health emergency, this is the perfect and crucial time for Congress, the Administration, the private and non-profit sectors to open our benefits programs to transformative reforms through better data sharing, state flexibility (with appropriate and immutable protections for beneficiaries), and innovative management strategies that dramatically and measurably improves both service to beneficiaries as well as the accuracy and integrity of the programs. That would be real innovation. Congress has the opportunity to address the issue directly and immediately through the Build Back Better plan, which acknowledges the “cliff” but takes only modest steps to address it.
The fact is that the data exists; the technology exists; and the need exists, to do more. What’s missing is the concerted, sustained leadership to make it happen. It’s the kind of “tax reform” everyone should be able to get behind.
Stan Soloway serves as Chairman of the Board for the Center for Accountability, Modernization, and Innovation (CAMI). He previously served as the Deputy Undersecretary of Defense during the Clinton administration.