First Data Shows Alarming Impact of Medicaid Unwinding in Texas

First Data Shows Alarming Impact of Medicaid Unwinding in Texas

Governor Abbott can take steps to keep eligible Texans covered.

Over half a million Texans were removed from Medicaid health coverage in June, according to new data released by the Texas Health and Human Service Commission (HHSC). 

Texas Medicaid’s “unwinding” of pandemic continuous coverage is an enormous undertaking, unprecedented in scale for our state’s eligibility and enrollment system. For the past three years, under COVID-19 emergency rules, anyone enrolled in Medicaid could keep their coverage regardless of whether they still meet eligibility requirements. Now, HHSC is reviewing eligibility for millions of Texans, and the first data released indicate that the state’s process is likely disenrolling many eligible Texans.

Half a Million Texans Lost Medicaid in First Wave

We are alarmed that 81% of over 500,000 Texans removed from Medicaid in June were not actually determined ineligible; rather, they lost coverage due to red tape (called “procedural” reasons). This includes things like Medicaid sending their paperwork to an old address, confusing paperwork not in the family’s language, or the family not completing all required steps. Of states that have reported unwinding data as of July 21, 74% of disenrollments on average were due to procedural reasons, and Texas’ rate of red tape denials is even worse than this shameful national average. 

A major factor in this high procedural cut-off rate is that HHSC renewed coverage using data-driven tools (also known as “administrative” or “ex parte” renewal) for less than 1% of the more than 785,000 Texas Medicaid enrollees notified in April they needed to renew. In comparison, Arizona reports 62% of their first round of unwinding renewals were successfully completed administratively. 

Texas is off to a terrible start, and the harm won’t fall evenly. State leaders should be transparent about who is losing coverage in Texas –– children, especially Latino/Hispanic and Black children, are far more likely to lose Medicaid despite remaining eligible, due to red tape denials. This initial data from HHSC is limited and does not show how many of those who lost coverage were children, low-income seniors, or individuals with disabilities. All of these groups are likely to remain eligible for Medicaid, yet risk losing their coverage anyway. Advocates, providers, health plans, and others will be better able to support HHSC if these details are shared by the agency. We call on HHSC to release data on unwinding outcomes for children, seniors, and individuals with disabilities and with race/ethnicity information.

Even before the increased workload from renewals, Texas HHSC experienced big delays in processing Medicaid applications and renewals, starting in 2021 and persisting through the beginning of unwinding. The shortage of eligibility workers and backlogs of Medicaid and SNAP paperwork have persisted for more than a year. HHSC has worked hard to fill eligibility worker vacancies and has leveraged temporary federal flexibilities to reduce the workload, increased outreach to clients, and equipped Medicaid health plans to help clients renew, and these efforts have brought improvements. Still, these first numbers on unwinding, as well as state reports on new Medicaid applications, show that much more effort and more powerful tools are needed.  

What steps can be taken to keep eligible Texans covered?

  1. Every Texan urges the Governor to “hit pause” on Medicaid disenrollments until the state adopts a strong program to reduce red tape denials. While HHSC administers Medicaid, only the Governor can approve new flexibilities.

    Texas should immediately elect federal flexibilities available to reduce these red tape denials and adjust its self-imposed timeline, currently planned to follow the April group with 1.3 million renewals in July, the same number in August, and another million in September.  Until it can be shown that the additional flexibilities are reducing red-tape denials and speeding up successful renewals, sticking to the current plan will only create additional delays in the overwhelmed eligibility system. 

  2. Beyond the recommended pause, Texas has the option to immediately extend coverage for 30 days for anyone who’ll be subject to a red tape denial, as long as the state does targeted outreach to these individuals during that time. In order to make that option effective, HHSC will also need to empower a full range of qualified partner organizations–e.g., health plans, health centers, and community partners–to help Medicaid clients complete renewals, so that half-finished cases don’t simply add to backlogs. 
  3. The 400,000 Texans who just lost Medicaid through procedural denials may still be eligible for the program. To make it seamless for eligible people to get back into the Medicaid program,  we recommend that HHSC quickly upgrade to facilitate online renewal and verification during their 90-day reconsideration period without needing to re-apply. Texans who successfully complete renewal during their 90-day reconsideration period should have coverage reinstated back to their recent termination date. These two steps will help eligible Texans remain covered and support the health care delivery system.
  4. Texans with Medicaid should keep an eye out for a yellow notice in the mail with the words “action required” written in red and respond to requests for information right away. If you missed a deadline or lost your Medicaid, you still have options to re-enroll. You don’t have to go through this alone—local help is available. If you’re confused or unsure about a notice or need help accessing your account, you can find local help near you through the Texas Community Partner Program.  More resources, plus tools for Legislator’s offices helping constituents are here. 

Nearly half of all children in Texas under 19 are covered by Medicaid or CHIP, and Medicaid is a lifeline for low-income seniors and Texans with serious disabilities. Ensuring that our state systems are up to the task of correctly determining eligibility is critical to the health and well-being of millions of Texans.

For more on Medicaid unwinding: 

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