Congress enacted a federal COVID relief law in 2020 that allowed people with Medicaid to maintain their coverage, gave families extra help through the Supplemental Nutrition Assistance Program (SNAP), and provided substantial additional federal Medicaid and SNAP funding to states during the pandemic. The additional benefits and federal funds are available only during the federally declared COVID-19 Public Health Emergency (PHE). These policies have supported Texas families and our state budget during a volatile time. Low-income families, postpartum mothers, seniors, and people with disabilities have been able to maintain reliable and affordable health coverage and received extra help paying for food through a period marked by job loss, housing disruptions, increased mental health needs, a strained health care system, and steep increases in the prices of food, rent, and gasoline. Texas has so far received an additional $6 billion in federal funding to offset increased Medicaid enrollment and more than $8.5 billion in additional federal SNAP funds.
At some point in 2023, the PHE will almost certainly be lifted. States will then resume regular Medicaid renewal processes, including disenrollments that have been paused during the pandemic. When this happens, children with Medicaid in Texas — particularly Black and Latino children — face a heightened risk of losing health insurance coverage, despite remaining eligible for Medicaid or the Children’s Health Insurance Program (CHIP). Families will also stop receiving extra SNAP benefits, meaning they will have less help paying for food.
State leaders and the Health and Human Services Commission (HHSC) must carefully prepare now and address significant eligibility staff shortages to help prevent a tidal wave of eligible Texans — primarily children — from losing Medicaid coverage starting as early as February 2023. Without adequate preparation, crucial state systems could collapse under strain, not unlike what happened to Texas’ unemployment insurance system early in the pandemic.
October public health emergency extension is critical for Texas
On October 13, the federal government extended the COVID-19 PHE declaration, as has happened every three months since January 2020. This extension is critical for Texas. Staffing shortages have led to a backlog of SNAP and Medicaid applications and renewals today — without the increased demands approaching with the end of the PHE — causing some Texans to wait months for needed benefits. HHSC has taken meaningful action to reduce eligibility worker vacancies and backlogs, though the long wait times have persisted. The Texas Legislature must provide more state budget funding to raise low salaries for critical and hard-to-fill positions like eligibility workers.
Eventually, the PHE declaration will be lifted. If this October’s PHE extension is the last, we would receive notice by November 12, and the process to “unwind” Medicaid continuous coverage (meaning checking eligibility for everyone on Texas Medicaid) would begin in January 2023. Medicaid disenrollments would resume in February, the same month SNAP benefits would be cut. Enhanced Medicaid federal funding would no longer be available to states starting on April 1, 2023.
Eligible kids will lose coverage, especially kids of color
Nearly 3 of 4 kids who will lose Medicaid at the end of the PHE will still be eligible, and kids of color will lose coverage at disproportionate rates. National projections show 64% of Latinos and 40% of Black non-Latinos who will lose coverage at the end of the PHE will still qualify for Medicaid, compared to only 17% of White non-Latinos.
Eligible individuals lose coverage through “procedural” denials, not because they were actually determined ineligible. HHSC issues a procedural denial when it can’t access data needed to verify ongoing eligibility or if a person misses a step in the renewal process. This often stems from bureaucratic barriers in the enrollment or renewal process, barriers that both reflect and contribute to racial and health inequities.
Something as simple as the state using an old mailing address can cause an eligible kid to lose coverage. Many families have moved since 2020, making bad addresses and returned mail a big PHE challenge. Using federal flexibility available under the PHE, HHSC plans to start updating bad addresses using reliable data from the U.S. Postal Service and managed care organizations.
The challenge ahead for Texas’ enrollment system
When the PHE ends, HHSC will face the enormous task of reviewing eligibility for all 5.4 million Texas with Medicaid. This is a big task under normal circumstances, but HHSC will unwind in a much more challenging context:
- HHSC plans to quickly initiate renewals for about half of all Medicaid clients — 2.7 million Texans who have had their coverage extended during the PHE — over just three months and complete processing those renewals on a short, state-imposed timeline. Texas is one of only eight states that plans to unwind PHE continuous coverage without allowing up to a year, the period allowed in federal guidance.
- Staff shortages will likely continue to be a challenge. The vacancy rate for eligibility workers has improved, but still stands at 11%. In its budget request to the Legislature, HHSC clearly laid out its need for additional funding for salary increases to help fill current vacancies, but it does not address additional capacity that unwinding will demand. Any state budget increase that takes effect in September 2023 may come too late to help during unwinding.
- Federal flexibility that HHSC has used to dig out of application processing backlogs during the pandemic will expire at the end of the PHE. Texas has yet to pursue important flexibilities and efficiencies that will remain available during unwinding and that would relieve burdens on eligibility workers. Increased efficiency from these options could help overcome challenges from the state’s staffing shortages and tight unwinding timeline. For example, Texas could increase its very limited use of data-driven renewals by drawing from information already verified by SNAP or fully utilizing Texas Workforce Commission income data.
Recent experiences in Utah serve as a cautionary tale. When Utah resumed renewals in its CHIP program, it disenrolled an unprecedented 41% of children, the vast majority — around 89% — because of a procedural issue, not because the state determined they were ineligible.
What’s next?
HHSC has taken many steps to prepare for the end of the PHE. For example, it reduced hold times at the 2-1-1 option 2 call center, released outreach and public-facing materials, and established a system to let managed care organizations assist clients with renewals. Advocates, including Every Texan, have made recommendations to HHSC with additional steps needed to reduce procedural denials and keep eligible Texans covered.
The stakes are high for Texas families, health care providers, and communities that rely on an effective eligibility and enrollment system as the necessary foundation for meeting food and health care needs of eligible Texans. If Texas does not prepare for PHE unwinding in a manner that addresses the many challenges families and the HHSC eligibility system will face, the chaos could lead to a huge spike in eligible children and postpartum moms losing their insurance at a time when families will already be struggling to pay for food. With the PHE extension on October 13, Texas will thankfully have a little more time to prepare for the enormous task ahead.