This article originally appeared in Crain’s Detroit Business March 27, 2023.

Now that the end of the federal public health emergency over COVID-19 is in sight, states are set to resume checking eligibility for those receiving Medicaid. But Gov. Gretchen Whitmer and the Michigan Department of Health and Human Services have announced plans to delay the verification process in Michigan.

Unless they move quickly to ensure people receiving Medicaid are eligible for it, Michigan will be working to protect the profits of Medicaid insurance companies at the expense of the truly needy.

Before the COVID-19 pandemic, states engaged in routine reviews of Medicaid beneficiaries' eligibility. At the height of the COVID-19 pandemic, however, Congress passed legislation that traded increased federal funding to states for the continued enrollment of everyone on Medicaid — even if enrollees became ineligible.

While states can stop paying insurers for those no longer eligible for Medicaid as of April 1, Michigan has announced it will delay doing so until at least July 1. Insurers get paid a predetermined amount each month for every insurance card they have issued. The delay in processing Medicaid redeterminations means Medicaid insurers will continue to pocket taxpayer dollars for each ineligible Medicaid enrollee they have on the books. Instead of an accelerated time frame to recheck eligibility — given the three-year lapse — the state will take more than a year to check eligibility for the rest of those on Medicaid. Prior documents said they would take up to a full 14 months.

Any delay in rechecking Medicaid eligibility means more money for insurers and fewer resources for the truly needy. Michigan taxpayers will have to foot the bill as extra federal dollars are phased out.

These impacts could be significant given Medicaid's enrollment boom during the COVID-19 pandemic. Nationwide, over 20 million individuals enrolled in the program, with Michigan seeing over 700,000 additional sign-ups. Without Medicaid redetermination procedures actively in place, the number of individuals enrolled in Medicaid who no longer qualify for the program grew, too. Research by the Foundation for Government Accountability found that in 17 other states, approximately 90 percent of those who enrolled during the pandemic were no longer eligible by January 2022.

The result was that Medicaid resources flowed for nearly three years to managed care insurers to cover individuals who do not even qualify for the program. In many cases where individuals have moved or secured employer-sponsored coverage, these nonqualified individuals haven't even used the Medicaid services for which the insurers are being paid.

Thankfully, Congress passed legislation that sunsets the increased federal funding and allows states to restart Medicaid redeterminations, but Michigan appears to be taking a very slow approach.

Michigan officials must quickly review enrollees based upon which categories are most likely to be deemed ineligible — likely those groups that grew most during the pandemic or have no claims for service. Removing these noneligible individuals from Medicaid quickly is critical to supporting the most vulnerable of Michigan residents.

Michigan officials must also use all available and credible data sources to help determine if individuals no longer qualify for reasons like moving, enrolling in private coverage, or passing away. An appeals process must work quickly, and state officials should continue to update the public about the status of the redetermination process. If Michigan outsources any of this work to third-party organizations, those groups must have no financial interest in keeping noneligible individuals on Medicaid.

Restarting Medicaid redeterminations will help right-size Medicaid, so it does not divert money away from education or public safety. It will also help restore confidence in the program. Most other social services programs, like food stamps and child care assistance, restarted eligibility checks in the summer of 2020 — Medicaid has been the outlier.

Those who qualify for Medicaid will retain coverage, and their care is covered if they are mistakenly removed. Closing the cases of those who no longer qualify will stop blank checks from being sent to insurance companies for ineligible enrollees. Washington, D.C., may have started this problem, but now it's up to Michigan policymakers to fix it, and fast.

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