Medicaid Continuous Eligibility and its Associations with Administrative Costs, Unmet Needs, and Health Service Utilization

Abstract

Medicaid acts as a vital safety net in the United States—providing health insurance for households with limited income, seniors needing long-term care services, and persons with disabilities. However, income fluctuations and unsuccessful Medicaid renewals result in transient lapses in coverage for some enrollees, otherwise known as churn. Prior studies have estimated that around eight percent of enrollees experience churn within a year. Enrollees experiencing churn may be more likely to delay or forgo preventive care, potentially leading to adverse health outcomes and higher healthcare costs downstream. Policies such as implementing ex parte renewals or reducing the number of eligibility checks conducted each year have helped to reduce, but not eliminate, churn. In March of 2020, the United States Congress passed the Families First Coronavirus Response Act, which introduced maintenance of effort (MOE) requirements in exchange for enhanced federal funding to states. To comply with MOE requirements, states ensured enrollees had continuous eligibility throughout the public health emergency period, which spanned March 2020 through March 2023, regardless of changes in financial circumstances. This policy temporarily eliminated almost all churn and contributed to record high Medicaid enrollment, but its consequences for administrative cost, unmet healthcare needs, and service utilization are unclear. The purpose of this dissertation is to assess the relationship between continuous eligibility policy and 1) administrative costs; 2) unmet medical, dental, and prescription medication needs; and 3) health service utilization. This dissertation includes three studies: 1) a pre-post analysis of state-year panel data that assesses trends in overall, per-enrollee and per capita administrative spending; 2) a difference-in-difference with inverse probability weights analysis that examines the relationship between churn and unmet medical, dental, and prescription medicine needs; and 3) a comparative interrupted time series study that compares changes in well-child, preventive dental, office-based, emergency department, and hospital encounters by history of churn. With Medicaid consuming about eight percent of federal and 30 percent of state budgets, respectively, policymakers have and will consider Medicaid financing reform, benefits redesign, and innovations in eligibility and renewal policies. Evidence from this dissertation will help inform policymakers about the tradeoffs of various decisions and priorities.