Texas Medicaid Unwinding: A Crisis in Coverage
This article is co-published with The Texas Tribune, a nonprofit, nonpartisan local newsroom that informs and engages with Texans. Sign up for The Brief Weekly to get up to speed on their essential coverage of Texas issues.
Reporting Highlights
- Texas Prioritized Speed: When the federal government’s pandemic-era protections ended last year, Texas moved swiftly, kicking off more people faster from Medicaid than any other state.
- Persistent Warnings: Officials acknowledged some errors during the Medicaid unwinding, but an analysis shows that various mistakes were preventable and foreshadowed in persistent warnings.
- Eligible People Removed: Nearly 1.4 million people who lost coverage were disenrolled for reasons like failing to return a form or completing one incorrectly, not because they weren’t eligible.
For three years during the coronavirus pandemic, the federal government provided Texas and other states with billions of dollars, contingent upon their commitment not to exacerbate the public health crisis by removing individuals from Medicaid. However, when that agreement ended in April 2023, Texas took a markedly different approach than many other states, swiftly disenrolling more than 2 million people, primarily children.
A Swift and Aggressive Approach
Texas’ approach to the Medicaid unwinding was characterized by a rapid review of approximately 4.6 million cases within the first six months. This aggressive strategy led to the disenrollment of nearly 1.4 million individuals for bureaucratic reasons—such as failing to return a form or submitting incorrect information—rather than due to ineligibility. This decision starkly contrasted with federal guidelines, which urged states to proceed cautiously and utilize existing government data for automatic renewals.
Erin O’Malley, a senior policy analyst with Every Texan, remarked on the striking difference in Texas’ approach compared to other states, emphasizing that the state’s desire to remove individuals from the program was evident. “It wanted everybody off, anybody extra off, even though we knew that meant that state systems would buckle under the pressure,” she stated.
The Impact on Vulnerable Populations
The consequences of Texas’ rapid Medicaid unwinding were dire, particularly for vulnerable populations. Children who required critical medical care, including lifesaving surgeries, found themselves without coverage. Dr. Kimberly Avila Edwards, an Austin pediatrician, highlighted the plight of a boy with a rare heart condition who lost his Medicaid coverage due to a missed form. His family could not afford the necessary medication or medical procedures, illustrating the severe ramifications of the state’s swift actions.
The situation was compounded by the fact that Texas already had one of the lowest rates of Medicaid coverage in the nation, having never expanded eligibility under the Affordable Care Act. This lack of coverage meant that many families were left scrambling to navigate a complex system, often without the necessary resources or information.
Ignored Warnings and Federal Guidance
Despite warnings from federal officials about the potential fallout from a rapid unwinding process, Texas proceeded with its aggressive plan. The Centers for Medicare and Medicaid Services (CMS) had advised states to limit their monthly reviews to no more than 11% of their caseloads to avoid overwhelming their systems. However, Texas chose to review 17% of its cases in the first month alone.
As disenrollments began to mount, advocacy groups and health providers raised alarms about the impact on families. In response, U.S. Health and Human Services Secretary Xavier Becerra urged Texas to increase the number of eligible individuals automatically renewed using existing government data. However, the state remained steadfast in its approach, leading to a significant backlog of applicants and a growing number of families without coverage.
The Human Cost of Bureaucratic Errors
The human cost of these bureaucratic errors became painfully evident as families struggled to regain coverage. Micaela Hoops, a North Texas mother, found herself in a desperate situation when her children lost their Medicaid coverage due to a missed deadline for income verification. The family faced mounting medical bills, including a $3,000 emergency room visit for her son, which they could not afford.
While Hoops eventually regained coverage for her children, many families continued to wait for their applications to be processed, with Texas’ median processing time exceeding the federal limit of 45 days. The backlog not only affected Medicaid applications but also food assistance, as the state used the same eligibility system for both programs.
Broader Implications for Healthcare Providers
The fallout from the Medicaid unwinding extended beyond individual families to impact healthcare providers across Texas. Hospitals and clinics reported significant financial strain as they faced an influx of uninsured patients. Texas Children’s Hospital, the largest pediatric hospital in the country, laid off employees due to budget shortfalls attributed to the loss of Medicaid patients.
Community health centers also reported a 30% decrease in Medicaid revenue, leading to staff layoffs and reduced services. Jana Eubank, head of the Texas Association of Community Health Centers, noted that some facilities were forced to cut back on essential services, including behavioral health and dental care.
Federal Investigation and Future Consequences
In response to the widespread disenrollments and the challenges faced by families, the federal government launched an investigation into Texas’ handling of the Medicaid unwinding. While this investigation was welcomed by advocacy groups, experts noted that the federal government had limited options for holding Texas accountable. The potential for significant consequences, such as the loss of federal funding, could further jeopardize the health coverage of low-income individuals.
As the investigation unfolds, families like Micaela Hoops’ continue to navigate a complex and often unforgiving system, reflecting the broader challenges faced by low-income Texans in accessing essential healthcare services. The ongoing crisis underscores the urgent need for systemic reforms to ensure that vulnerable populations are not left behind in the wake of policy changes.