Strings attached to federal coronavirus relief funding appear to be inflating New York’s Medicaid enrollment – and costs – at a time when the state faces unprecedented deficits.

As part of a coronavirus relief package enacted in March, Washington offered states a big boost in Medicaid funding, worth $2.3 billion or more for New York’s coffers. That money came with conditions, one of which barred states from disenrolling anyone, unless requested by the recipient, until the federal emergency declaration lapses.

Normally, a small percentage of enrollees drop out of the program each month because they have died, moved out of state, found alternative insurance, lost eligibility or simply failed to renew their registration, which is required every 12 months. But that process of attrition slowed significantly after the federal relief package took effect.

The effect is visible in enrollment data from the Centers for Medicare & Medicaid Services: From February to August of last year, an average of about 120,000 New Yorkers per month successfully applied for Medicaid even as the state’s total enrollment stayed flat. That implies that roughly 120,000 recipients per month were also dropping off the rolls.

In April of this year – the first month after the federal policy change took effect – 138,000 New Yorkers signed up for Medicaid and enrollment jumped 99,000. This implies that only about 42,000 dropped off the rolls, about one-third the usual number.

More recent CMS numbers are not available. According to data from the state Health Department, total enrollment has jumped by 520,000, or 9 percent, since February – rising to an all-time high of 6.6 million as of last month. As previously noted in this space, this is the sharpest rise in New York’s Medicaid rolls since the Affordable Care Act took effect in 2014.

Much of the increase is undoubtedly driven by the coronavirus-induced recession, which has thrown more than 1 million New Yorkers out of work. Some share of it, however, is a side effect of the federal policy change, which has stopped the routine disenrollment of people who no longer belong on the rolls.

The valid purpose of a policy like that is to avoid unnecessarily disrupting coverage during a public health crisis. Now that the worst of the pandemic is past, the policy is compelling states to provide coverage that’s no longer needed or necessary – if, for example, recipients have married someone with insurance, found a job with health benefits or moved out of state.

Given the massive financial squeeze facing Albany, that’s an expense the state can ill afford.

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

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