Potential Medicaid Coverage Loss Looms Large in Philadelphia

Thang Truong
Thang Truong
Updated on:

Tension is mounting in Philadelphia as thousands of Medicaid beneficiaries are required to reapply for their coverage, a mandate that hadn’t been implemented since March 2020. A new wave of data from the Pennsylvania Department of Human Services has raised concerns that a substantial number of these recipients may be deemed ineligible, thereby losing their health insurance. As the process unfolds, advocacy groups, beneficiaries, and health insurance organizations are keeping a watchful eye on the outcomes.

Uncertainty Surrounds Medicaid Renewal

As of April, Medicaid recipients for the first time since March 2020, have to reapply to confirm eligibility. This change sparks fear among advocates, despite state officials declaring it too early to draw conclusions.

The Pennsylvania Department of Human Services, which manages the state’s Medicaid program, revealed that about 32% of the 137,611 applicants who underwent the process in the first month were at risk of losing Medicaid. The reason? Either their income exceeded the limit, or they encountered procedural issues, like incomplete documentation.

Courtney Bragg, an advocate and co-founder of Fabric Health, said, “It’s a confusing and multistep process to stay insured.” Fabric Health, a Philadelphia startup, supports insurance companies in their regular outreach initiatives, assisting people to navigate complex benefits systems and register for insurance.

Appeals Process Could Retain Some Coverage

The uncertainty remains regarding the exact number of people among the 43,546 cancellation notices recipients after the April review who would eventually lose coverage. Valerie A. Arkoosh, the Acting DHS Secretary, stressed at a Pennie board meeting that it’s too early to estimate the number of individuals who have lost Medicaid because of the ongoing appeals process. Individuals have a 90-day window to appeal an adverse decision.

Significant Shift in Post-Pandemic Medicaid Policy

In the wake of the pandemic, a new rule surfaced in March 2020, restricting states from discontinuing Medicaid coverage except under certain circumstances, such as relocation to another state. Consequently, 1.3 million Pennsylvanians remained on Medicaid due to this rule, increasing the total enrollment to 3.7 million.

However, starting from April, the federal government necessitated state Medicaid programs to start discontinuing coverage for ineligible individuals. Pennsylvania is adopting a staggered review approach, asking individuals to reapply during their usual renewal month.

Medicaid to Pennie: A Seamless Transition?

A key aspect of DHS’ strategy involved the seamless transition of individuals who no longer qualify for Medicaid to Pennie, the state’s health insurance exchange. As of last week, Pennie reported that 33,346 such individuals had applied for coverage, and 3,178 had chosen a plan.

A Pennie spokesperson commented that 50% of the Medicaid households transferred to Pennie signed up for insurance plans with monthly premiums under $50. A fifth of these households are paying less than a dollar a month.

These numbers are expected to rise, given the special enrollment period for Medicaid redetermination, allowing people 60 days to enroll while maintaining continuous coverage, extending up to 120 days in total.

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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