The Great Unwinding of Pandemic Medicaid Support Has Begun

The end is here. Not the end of the COVID-19 Public Health Emergency (PHE), which the Department of Health and Human Services has announced will “expire” at the end of the day on May 11. Continuous Medicaid enrollment, once tied to the PHE, ended on March 31.

The Families First Coronavirus Response Act, which became law in March 2020, authorized an increase in the federal Medicaid match rate for states and required them to keep people continuously enrolled without redetermination of eligibility. By December 2022, Medicaid enrollment had grown by more than 21 million, an increase of almost 30 percent.

State and local officials have been bracing — and preparing — for the challenges of resuming verification of eligibility after a three-year break. Estimates of the number of people who will lose Medicaid coverage during this process range from 14 to 18 million, numbers approaching 1 in 5 current enrollees.

Unwinding pandemic benefits — contacting current enrollees, verifying their eligibility, re-enrolling them or helping them transition to other coverage — will be yet another Herculean task that COVID-19 has brought to public-sector workers and systems. Close to 4 million Americans are expected to become uninsured, with additional social consequences.

Karen Shields, the former deputy director of Medicaid at the Centers for Medicare and Medicaid Services (CMS), who now works in an allied industry, offered perspectives on what lies ahead in a conversation with Governing. This interview has been edited for length and clarity.

Governing: It’s been estimated that 4 million Americans could end up uninsured now that pandemic benefits are over. Is that a rosy estimate — could the problem be worse than that?

Karen Shields: The health-care exchanges are more affordable than they used to be, and there's more opportunity for people to be covered. I’m going to lean toward the more rosy estimate.

There is more health literacy, and I don't mean health literacy in the traditional sense. I mean awareness of health-care insurance coverage as a necessity.

Governing: Have state and local agencies ever had a job to do as big an unwinding as in this program?

Karen Shields: No. This is historic and it's going to be traumatic.

I'm one of those people that looks for benefits in something like this. We talk about all the bad things that happened over the past couple of years related to the public health emergency, but there's a list of things we never thought we could do that we did.

Governing: Everyone knew this was coming, or should have. Are the agencies that will be doing this work ready?

Karen Shields: The humanity in all of us is that we’re going to stay as comfortable as we can until we're forced to be uncomfortable. A lot of times, preparation requires us to be uncomfortable.

There are 50 states and 10 territories, and the level of readiness is going to vary. When I visit a state, I always [turn] on their local news. If there's nothing on the news about unwinding, or whatever their definition of it is, that people could lose coverage, then I realize that the engine for communication and outreach in that state may be behind.

My guess is that if you've been paying attention to the communications plan, you've been paying attention to the systems plan.

Governing: What are some potential stumbling blocks?

Karen Shields: Hiring and staffing is an issue for every business, and this is the environment of the employee. They get to negotiate because the market is so competitive.

All states will be competing for the same skill population to deliver this work. If you are only allowed to hire people for X state that live in X state, you limit the ability to leverage resources. Once everybody in your state is either hired or says “no,” you're going to have a backlog.

One of the breakthroughs that I hope this emergency creates is that the Medicaid program takes a second look at offshore support. You can clear out backlogs with people that we know how to train, because for the first time in a long time they will all be doing a lot of the same things at the same time.

Governing: Are there other strategic approaches to this work?

Karen Shields: Be humble about the process. Don't believe you've got it. Assume you don't and have a backup plan. That's a high-level leadership recommendation.

The other thing is tabletop exercises, where you pretend that all the worst things happened. Phones died. The website went down. Everybody showed up at once, or you are helping a whole bunch of people right now but they're not the people at the highest risk of losing coverage.

Data analytics matter more than they have ever mattered before. Everybody's going to want to know how many to start with, how many to kick off, and where do they go?

This cannot be a Medicaid director's job alone. Support for this event has to be at the governor's level, the legislature. The whole village has to surround the people that are impacted in each state to make this happen.

Governing: When this program was implemented was there enough thought about what would happen when the extended benefits ended?

Karen Shields: We all have a Ph.D. in 2020 hindsight. None of us knew it [the pandemic] was going to last this long.

CMS and Congress are not the only ones who have lessons to learn. We all probably have personal lessons to learn about whether we should have a battery backup or stock up on toilet paper.

Governing: What would you hope to see come out of this experience?

Karen Shields: We have to get to user-centered design.

The Medicaid program is 50 plus 10 things [50 state and 10 territorial programs]. It’s hard to get providers together. It’s hard to get their opinions.

One of my personal visions for Medicaid and one of the lessons learned from the public health emergency, quite frankly, is that we need to engage Medicaid providers at a national level.

It's hard to get their opinions. It's hard to get them together. It's hard to design for them. Medicaid has the lowest payment rate and the highest separation rate [providers leaving]. You don’t want doctors to quit serving the most vulnerable populations.

There’s a very necessary tension and partnership between public interest and private interest. States and the federal government don’t leverage private-sector knowledge enough.

Governing: Any last thoughts?

Karen Shields: If you pay attention to anything long enough, you're going to see some results. If things are going the wrong way, the right people are around the table to help this calibrate.

The worst thing that all of us could do — and I don't really see anybody doing this — is just hope it turns out OK.