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Alabama Medicaid will soon begin sifting rolls

A record 1.3 million Alabamians are currently receiving Medicaid benefits, up from 1.05 million just prior to the COVID-19 pandemic.

After a three-year federal requirement not to remove people from their rolls during the public health emergency, Alabama and other states will soon be able to start disenrolling people who now earn too much to qualify for the insurance program for the low-income and disabled. 

That “unwinding process” will require reviewing all 1.3 million recipients and will be about a year-long process, Alabama Medicaid Commissioner Stephanie Azar recently told a panel of lawmakers. 

While enrollment has ballooned since early 2020, the federal requirements not to stop peoples’ coverage unless they request removal, die or move out of state also came with significantly more federal funding for Medicaid. 

Prior to COVID-19, the federal government paid about 72% of Alabama Medicaid’s expenses. In response to the pandemic, that amount was increased to about 78%.

That’s been an advantage for the state, despite the larger enrollment. Azar told lawmakers the population “flagged” for potential removal over the next year has cost Medicaid about 40% of what other Medicaid recipients do. While that increased, COVID-related federal funding will be phased out between now and the end of the year, it will more than cover the cost of the population likely to be “unwound” this year.

Looking at fiscal year 2024, Azar last week requested $863 million from the state’s General Fund. This year’s General Fund allocation is about $793 million.

Unwound, in the gap

Medicaid spokeswoman Melanie Cleveland told Alabama Daily News that the agency can’t yet estimate how many people will lose coverage.

“It’s difficult to predict a number of people who may be terminated when continuous enrollment ends on March 31st,” Cleveland said. “Changes to circumstances may have occurred for recipients since the continuous coverage was implemented. They may no longer qualify for their current program, and they may qualify for a different program within Medicaid.”

The Associated Press reported recently that as many as 14 million people nationwide could be removed from Medicaid. Alabama Arise, an advocacy group for low-income residents, cites a recent study that says 61,000 Alabamians could lose Medicaid coverage in the next year.

“We believe those people will be in the coverage gap and a number of them will not have affordable insurance coverage options,” said Jennifer Harris, a health policy advocate for Arise.

Even prior to the pandemic, there were an estimated 300,000 Alabamians living in the health coverage “gap.” They earn too much to qualify for Medicaid under the state’s stringent income limit but too little to qualify for marketplace plans subsidized under the Affordable Care Act.

“A vast majority of these people get up and go to work every day,” Harris said. Arise is among a coalition of groups that has advocated for years for the state to expand Medicaid under the Affordable Care Act and provide coverage to those low-wage earners.

For children and pregnant women to qualify for Medicaid, a family of four this year has to earn $43,800 or less. But in order for a caregiver of a child on Medicaid to qualify for care, their income has to be much less, about $5,400 a year in a family of four.

Children are the largest group of enrollees in the health care program, making up more than 50% of the recipients. Alabama’s restrictions on Medicaid enrollment allow for very few able-bodied adults on the rolls.

Another concern for Harris is that people have gotten used to not having to file paperwork the last three years to stay on the program. While notices will be sent out, she’s afraid there will be an education curve that could lead to losses in coverage.

The “unwinding” of enrollment comes with several federal rules, Azar told lawmakers. For example, no more than 1/9 of the population can be removed in any month. 

She said her agency has been working for months on a plan to evaluate and remove recipients, some of which no longer qualify because their job situations have changed and they earn too much money to qualify.

“You can be assured an audit will follow unwinding,” Azar said. 

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