Children may lose insurance due to red tape, difficulty in renewal process

Continuous coverage for Virginians receiving Medicaid was one of the benefits of a pandemic-era law bringing down the uninsured rate and proving to be a lifeline to children and families.

The provision, set to expire April 1, will resume the regular Medicaid renewal process – which includes the task of conducting eligibility checks on the more than two million people enrolled in Medicaid.

Most children enrolled in Medicaid and Family Access to Medical Insurance Security, or FAMIS, are likely still eligible for coverage. However, difficulties in the renewal process, including staff capacity and lack of communication with enrollees, mean that eligible children could lose coverage.

These bureaucratic tangles are especially problematic for children and families, as gaps in coverage can expose them to large medical bills if a child gets sick, breaks a bone, or has a chronic or complex medical condition and delay important preventative care.

A new report by the Georgetown University Center for Children and Families at the McCourt School of Public Policy examines state-by-state growth in Medicaid and CHIP enrollment during the pandemic and explains that millions of individuals, particularly children, who are still eligible for Medicaid/CHIP could wind up uninsured when a pandemic-era law begins to wind down.

“The continuous coverage requirement has been a vital way for individuals and families to stay covered and get access to health care when they needed it during the COVID-19 pandemic,” said Sara Cariano, senior health policy analyst at Virginia Poverty Law Center. “There are different reasons enrollees will lose coverage when it ends — some will be ineligible and have to transition to other coverage, but others who are still eligible may lose coverage as they struggle to navigate the Medicaid renewal process.”

The Georgetown report finds that enrollment in Virginia’s Medicaid and CHIP (known in Virginia as FAMIS) grew by more than 160,000 children between March 2020 and August 2022. Virginia’s growth rate of children enrolled in Medicaid/FAMIS (21.2 percent) ranked 15th highest in the country. Children comprise nearly 46 percent of those enrolled in Medicaid or FAMIS in the state.

Data from the Centers for Medicare & Medicaid Services from 2018 through 2022 on Medicaid application processing times shows that a significant proportion of applications in Virginia took more than the 45-day standard for renewal.

If the state is not prepared to undertake the upcoming eligibility checks, these lengthy renewal times increase the risk of gaps in coverage.

“Medicaid unwinding is a major logistical challenge, and it will require careful planning and communication with enrollees to get this right. We need to work together now and prepare so we can limit those coverage losses and help families through this transition,” Cariano said.

Virginia’s Department of Medical Assistance Services expects that 14 percent of enrollees will lose coverage, while an additional 4 percent will lose coverage but re-enroll within a few months. That estimate would mean a loss of coverage for 146,452 of Virginia’s children.

A report by the U.S. Department of Health & Human Services predicts that children will experience a higher percentage of administrative disenrollments than adults – with 5.3 million children predicted to lose coverage nationwide.

“The uninsured rate for children could easily double especially in states that have more red tape barriers to enrollment and don’t dedicate the time and resources necessary to protect children from falling through the cracks in the system,” said Joan Alker, executive director of the Georgetown University Center for Children and Families and lead author of the report. “Governors and state leaders should do everything possible to protect children from getting caught up in red tape and losing their health coverage.”

Based on income eligibility guidelines, children in a family of three who make $50,963 annually will still be eligible for Medicaid or FAMIS coverage.

If families do lose coverage, there is help available through a free service called Enroll Navigator. Enroll Virginia is a project of VPLC that provides assistance with health coverage options through the ACA Marketplace and Medicaid/FAMIS.