Medicaid Redetermination And What It Means For Home-Based Care

In less than two weeks, there may be far fewer eligible Medicaid beneficiaries.

Medicaid membership ballooned during the pandemic. Millions of people were suddenly eligible for public health care when companies went through layoffs and when unemployment spiked.

Over the past three years, states were told not to disenroll people who didn’t specifically request it. With Medicaid redetermination requirements restarting across the country, fewer Americans will be considered Medicaid-eligible.

That could be a big deal for home-based care providers, given many offer home- and community-based services to Medicaid populations.

Some believe it will have a significant impact moving forward. Others, like Addus Homecare Corporation (Nasdaq: ADUS), do not.

“When states expanded their Medicaid, it really didn’t add a lot of business for us because all our elderly patients are already qualified,” Addus CFO Brian Poff said earlier this month at the Raymond James Annual Institutional Investors Conference. “So, we didn’t see a lot of upside from [rolling eligibility], and we don’t see a lot of downside with the return of redetermination from the standpoint of losing revenue.”

The Frisco, Texas-based Addus provides personal care, home health care and hospice care. Its largest business is Medicaid-based personal care services.

Others in the space, like the Missouri-based payer Centene Corp. (NYSE: CNC), are focused on maintaining as many Medicaid-eligible beneficiaries as possible.

“We are working closely with our state partners and our network of community partners in each market to facilitate member transition and coverage continuity,” Centene CFO Drew Asher said during the company’s fourth-quarter earnings call. “In the last month, we’ve deployed internal and external training designed to maximize each member touchpoint and our ability to support beneficiaries as their eligibility is reviewed.”

The impact redetermination will have on providers and insurers will vary from state to state. The urgency for starting the process has also varied so far.

According to a survey conducted by KFF and Georgetown University — with additional data from the Centers for Medicare & Medicaid Services (CMS) — eight states started this process in February, 15 states started in March and 28 states will begin in April.

In total, KFF estimates that between 5.3 million and 14.2 million people will lose Medicaid coverage during the 12-month unwinding period.

While home-based care providers will feel these losses, many believe the losses will be offset elsewhere.

Humana Inc. (NYSE: HUM) expects its Medicaid membership to increase in 2023, CFO Susan Diamond said during its fourth-quarter earnings call.

The company will make up for losses, and in this case see gains, from new contracts.

“We expect to add approximately 140,000 members in Louisiana and 65,000 members in Ohio at implementation with Ohio membership ramping to 130,000 by year-end and to a total of 225,000 in 2024,” Diamond said. “The 2023 membership gains in Louisiana and Ohio will ultimately be offset by membership losses resulting from redeterminations beginning April 1, which will continue for 12 months.”

From Addus’ provider perspective, it believes there’s even a chance Medicaid redetermination could bode well for the company.

“As a state’s Medicaid grows gets smaller because some of the folks that were added during the emergency are now taken off, the cost of the Medicaid program will be less for each state,” Poff said. “So we believe that has a potential to bode well for the state’s ability to continue to pay their bill.”

States getting to work

There is also promising data that shows many eligible Medicaid beneficiaries will be re-enrolled over the next 12 months.

“All states took action over the past year to encourage employees to update their mailing addresses and other contact information, including direct outreach to enrollees,” Jennifer Tolbert, associate director of the Program on Medicaid and Uninsured at KFF, said during a KFF webinar last week. “Most states are engaging with key stakeholders, including managed care organizations (MCOs), to assist with that outreach.”

About two-thirds of states plan to follow up with enrollees to complete renewals during the unwinding period and over half of states have created online portals to help enrollees stay on Medicaid.

Until the dust settles, there will be plenty of action from stakeholders to keep Medicaid beneficiaries eligible moving forward. The important thing now for states and other stakeholders is to clearly communicate to members and beneficiaries of the environment.

“We see that it is extremely important to share clear, concise communication – and do it often – to help to prepare our Medicaid recipients, our community health centers, our patients and community organizations for the unwinding and all of the changes that are going forward,” Tia Whitaker, director of outreach and enrollment for the Pennsylvania Association of Community Health Centers, said during the webinar. “Our messaging consists of, ‘There’s no wrong door for enrollment assistance.’”