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Minnesota Legislature hopes bill will smooth transition for Medicaid recipients coming off COVID-era benefits

Estimates are that between 100,000 and 300,000 Minnesota recipients of medical assistance will lose coverage over the next year.

State Rep. Mohamud Noor
State Rep. Mohamud Noor: “The unwinding process is going to be unprecedented, it’s going to be complex, it’s going to be difficult.”
House Media Services/Catherine Davis

Minnesota and other states can’t do much for Medicaid recipients who will lose coverage now that a pandemic-era freeze on removing no-longer-eligible families has ended. Estimates are that between 100,000 and 300,000 Minnesota recipients of medical assistance will lose coverage over the next year.

But a bill headed to Gov. Tim Walz will help smooth the transition and mitigate the impacts of what has become known as “Medicaid unwinding,” the federally ordered process under which every recipient will be asked to confirm that they still meet income requirements — up to $37,000 for a family of four — for the federal/state health insurance program. 

Starting Friday, one twelfth of the 1.5 million Minnesotans on Medicaid will have their cases reviewed each month. Some will lose coverage permanently. Others might lose it temporarily while they try to show that they remain eligible.

“The unwinding process is going to be unprecedented, it’s going to be complex, it’s going to be difficult,” said Rep. Mohamud Noor, a DFLer from Minneapolis, during debate on the bill Thursday. He sponsored the House version of the bill to provide money to the state Department of Human Services as well as the counties and one tribe that will work with recipients. Minnesota is one of just 10 states that delivers most social services at the county, not the state, level.

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“It’s going to be difficult for the enrollees who have to endure this process, because for the last three years there has not been any renewal process,” Noor, the chair of the House Human Services committee, said. And counties need money to hire and train staff to complete work that is mostly a paper process — work that they stopped doing at the beginning of the pandemic.

In the spring of 2020, Congress directed states to keep all current Medicaid recipients on the program for the duration of the public health emergency. And the federal government compensated states that would likely increase their share of Medicaid costs as otherwise ineligible recipients remained on coverage. Those payments — $1.8 billion for Minnesota alone — more than covered the increased state share of the cost and even contributed to the growth of the state’s revenue surplus.

While the federal public health emergency won’t end until the end of May, Congress voted in December to end the Medicaid continuous coverage provision early, on March 31, 2023. That left states scrambling to create and pay for the process of reconsidering the eligibility of each recipient. 

The bill also pays for navigators, which are nonprofit agencies that contract with the state to work with recipients to help them with the process. Some specialize in working with recipients who speak languages other than English. Finally, the bill waives for one year premiums that recipients pay for the state-subsidized MinnesotaCare. It is that program that helps insure residents who earn too much to qualify for Medicaid but don’t have employer-provided insurance or can’t afford policies in the individual private market. It is one landing place for those who are no longer eligible for Medicaid.

Language in other bills provides that once recipients are deemed to be eligible, they can’t be removed from coverage for a year in an attempt to reduce the normal churn of people whose finances change and go on and off the program. Children are to remain under continuous eligibility for longer periods under the bill.

Noor said the goal of the bill is that no one loses coverage, though that would be a best-case result.

“We’re trying to do our best with this bill to ensure that no Minnesotan loses their coverage,” he said. “This is about life and death.”

A spokesperson for the Department of Human Services said the first renewal notices will go out in April to recipients whose annual renewal is in July. Those forms must be returned with income verification by June 30. The process will then proceed with the August renewals and advance monthly for the next year.

“Ultimately this is about ensuring that Minnesotans eligible for public health care programs keep their access to health care without disruptions through this federally required process,” the department said in a statement Friday. “This bill recognizes the resources required to get that done and provides local entities what they have said the need to carry out renewal successfully.”

About one in four Minnesotans receive their health from public health programs like Medicaid and MinnesotaCare.

During the pandemic, caseloads grew, both in Minnesota and nationally. Because the normal churn of people joining the program and leaving was halted, enrollment grew by 330,000 enrollees during the pandemic, state DHS officials said. That is a 28% increase in caseload. Nationally, Medicaid enrollment grew by 27.9% to 90.9 million people, an increase Kaiser Family Foundation attributes to the continuous enrollment provision but also to additional states adopting Medicaid expansion under the Affordable Care Act and to economic impacts of the pandemic that might have made more people eligible. 

The bill — Senate File 2265 — passed the Senate Monday on a bipartisan 46-18 vote. It passed the House Thursday 82-44 and now goes to Gov. Tim Walz, who had requested funding for the program and is expected to sign the bill. 

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One concern raised by Republicans in the House was over the 12-month suspension of a program called “periodic data matching” that compares information on applicants for state aid with other state-held records on income, car and home values and applications for other programs. The purpose is to find inconsistencies in information provided that could suggest fraud.

“I agree with you that we don’t want to throw a single person off of a public program, but I wouldn’t put the period at that point in the sentence,” said Rep. Kurt Daudt, R-Crown. “I would add, unless they are not qualified or are fraudulently accessing that program.” Daudt said suspending the match program could cost the state millions in uncaught fraud.

Noor said the data matching will resume after the 12-month unwinding is completed.