Until recently, Jonathon Murray relied on Medicaid to pay for treatments for multiple health conditions, including chronic insomnia. Murray, a 20-year-old restaurant worker from the college town of Brookings, South Dakota, said that without his medication, he would stay awake for several nights in a row.
“I’d probably not be able to work that much because I’d be tired but couldn’t fall asleep,” he said.
Murray’s mother is paying $1,548 more than usual in health insurance premiums over three months to make sure he can afford his sleeping pills, other medication, lab work, and doctors’ appointments.
Murray had to scramble to find an insurance option after he was surprised to lose his Medicaid coverage on April 1 — even though he will likely re-qualify July 1.
Due to a convoluted situation in South Dakota and North Carolina, Murray isn’t the only person who will experience this whiplash in Medicaid coverage.
Medicaid is the joint federal and state health insurance program for people with low incomes or disabilities. During the national COVID-19 public health emergency, states were barred from removing people from the program even if they no longer qualified.
This rule has now ended, and states can redetermine whether Medicaid participants still qualify. The federal government estimates 15 million Americans will lose coverage under Medicaid or the Children’s Health Insurance Program because they no longer qualify or because of paperwork issues.
But as South Dakota and North Carolina remove participants from Medicaid, the states also plan to add people to the program. That’s because South Dakota voters and North Carolina lawmakers recently approved Medicaid expansion, which will increase the number of people eligible for the program.
“It would have been great if they would have kept people on until the expansion, so you’re not kicking so many people off,” said Kathy Murray, Jonathon’s mother.
South Dakota could have tried to prevent participants from temporarily losing Medicaid coverage, according to several health policy experts.
State officials are “saying federal regulations mean that they have to kick people off before expansion, and that’s just not right,” said Joan Alker, executive director of the Center for Children and Families at Georgetown University. “They absolutely could be structuring this in a way that those people didn’t experience a loss in coverage.”
Lucy Dagneau, head of Medicaid campaigns for the American Cancer Society Cancer Action Network, agreed. South Dakota and North Carolina “can’t actually stop the process of the unwinding. However, they have flexibility in terms of how they batch the enrollees,” she said.
Alker and Dagneau said states don’t have to start the unwinding process right away, and when they do, they could delay reviewing enrollees who are likely to re-qualify under expansion.
South Dakotans and North Carolinians who want to avoid a gap in health care coverage can apply for private insurance, which could be subsidized under the Affordable Care Act. They could then reapply for Medicaid once applications for expansion coverage begin. But if they wind up uninsured during the gap period, they might avoid seeking treatment or face expensive bills.
South Dakota is one of five states that began culling April 1, the earliest date possible. Its Medicaid expansion goes into effect July 1. About 16,000 South Dakotans were dis-enrolled in April, but more than 1,700 of them will re-qualify under expansion, according to state data.
North Carolina will begin dis-enrolling people who are no longer eligible for Medicaid on July 1. The state has not set a timeline for Medicaid expansion, but it’s expected to occur within the unwinding period, which lasts through May 2024.
Jay Ludlam, deputy secretary of North Carolina’s Medicaid program, said the uncertain timing makes it difficult to avoid temporarily dis-enrolling people. Ludlam said about 300,000 North Carolinians are expected to be removed from Medicaid during the unwinding. He estimated one-third of them will re-qualify after expansion.
Kathy Murray added Jonathon to her workplace insurance plan, which will more than double her premiums over the intervening months. She said she won’t be able to pay some other bills during this time, but her son can’t go without health care.
She said South Dakota’s approach seems inefficient, since state workers will have to dis-enroll and reenroll some people within a short period. “It’s creating a lot of work for the state workers because they’re going to send out paperwork and re-qualify everybody,” she said.
Matt Althoff, secretary of the South Dakota Department of Social Services, said that the agency’s unwinding plan is “based on compliance with CMS rules, limitations of the technology used to support South Dakota Medicaid, and the overall impact to customers.”
The agency wrote in a March document that it was working closely with the federal Centers for Medicare & Medicaid Services “to explore waivers and flexibilities during the period of the unwinding prior to expansion and will continue to do so.”
Althoff did not respond when asked by KFF Health News whether the state had discussions with the federal agency about avoiding temporary dis-enrollments. Sara Lonardo, press secretary for CMS, said the agency could not comment on whether it had any related conversations with South Dakota or North Carolina officials.
Although South Dakota won’t prevent people likely to requalify for Medicaid from temporarily losing coverage, it is taking steps to make sure they know to reapply.
The state is screening people who no longer qualify for Medicaid under the current rules to see if they would requalify after Medicaid expansion. If so, they should be sent letters encouraging them to reapply.
Since 2014, the Affordable Care Act has allowed states to offer Medicaid coverage to more people, with the federal government paying 90% of the costs. All but 10 states have opted into Medicaid expansion.
South Dakota adults currently qualify for Medicaid if they have a certified disability or have children and incomes up to 46% of the federal poverty level. That translates to $13,800 for a family of four.
Jonathon Murray qualified for Medicaid as a child. But he became an adult during the public health emergency and thus no longer qualifies.
Medicaid expansion will allow adults, with or without children, to enroll in the program if they earn up to 138% of the federal poverty level, or $20,120 for a single adult. Murray’s income as a part-time restaurant cook and dishwasher should allow him to re-qualify and begin receiving Medicaid coverage on July 1.
Get Covered South Dakota helps people understand and apply for health care insurance. So far, everyone the organization has assisted after being dis-enrolled from Medicaid has qualified for subsidized private plans under the Affordable Care Act’s marketplace, according to program manager Penny Kelley. For people with low incomes, the subsidies can cover most or all of their premiums.
South Dakota Voices for Peace, a nonprofit agency, is assisting people with the Medicaid unwinding and expansion process. Carla Graciano, its outreach coordinator, said many people are confused about the unwinding process after not having to worry about health coverage for more than three years during the public health emergency.
“We have heard concerns about people potentially losing their medical coverage,” Graciano said. “It puts a lot of people under stress.”