An Explainer on Oregon's Medicaid Eligibility Process

PORTLAND, Ore. (AP) — For the first time in three years people on the Oregon Health Plan and the Children’s Health Insurance Plan, the state’s Medicaid programs, could lose their coverage if their family income has gone up. The plans cover about one in three Oregonians, according to Oregon Public Broadcasting.

Federal rules require states to periodically verify the incomes of people on Medicaid and remove them if their income exceeds the program limits. Income checks were suspended during the pandemic but are resuming this month, following a timeline set by Congress to wind down COVID-19 pandemic emergency measures.

Oregon now has until June 2024 to process eligibility redeterminations for all 1.5 million Oregon Health Plan and Children’s Health Insurance members. The Oregon Health Authority has estimated that between 90,000 and 300,000 of those people could lose eligibility for Medicaid coverage due to income changes.

It’s the largest benefits renewal process the state has ever attempted.

And it’s fraught with challenges and uncertainties, among them whether people who still qualify for Medicaid will lose coverage due to not being able to complete the process and long wait times for calls to the state’s helpline.

Federal officials have estimated that nationwide, close to half of the people disenrolled over the next year will lose coverage despite remaining eligible, according to the Kaiser Family Foundation.

Some of those who lose Medicaid coverage will qualify for Medicare, which is federal health insurance for people 65 and older. Others will qualify for subsidized plans in the individual health insurance marketplace established by the Affordable Care Act.

But Oregon is also pursuing a plan that could radically remake the state’s insurance marketplace over the next several years, shifting federal subsidy dollars out of it and using the money for a state-run Basic Health Program for people who make just a little too much to qualify for Medicaid.

But before any of that happens, state officials have to sort through who is still eligible for Oregon’s Medicaid insurance programs.

How the remediation process works

The state kicks off the redetermination process this week. People on the Oregon Health Plan will get their renewal notifications at different times. To manage the workload, the renewals are being spread out over the next 10 months, with about 100,000 redeterminations starting each month.

In the best case income-check scenario, the state already knows a person’s contact information and how much they earn, and the eligibility check and renewal can happen passively, without the Oregon Health Plan member needing to do much.

If the state does not have enough information on file, it kicks off an active redetermination process. The plan member will receive a renewal packet in the mail.

They will have 90 days to respond, and will get two more reminder notices.

If at the end of 90 days, the member hasn’t responded, the state will send a notice informing them that their Oregon Health Plan benefits are being discontinued. They’ll have 60 more days of benefits left at that point. And their coverage can still be renewed if they respond within the next 90 days.

The agencies are asking people to update their address online, in person, or by phone and to watch their mail for a letter from the Oregon Health Plan.

People who are disenrolled — either because they did not connect with state officials or because their new, higher income makes them ineligible — will be directed to the healthcare.gov website, where they can purchase an individual health care plan and may qualify for subsidies.

It’s unclear if the Oregon Health Authority and the Oregon Department of Human Services can process more than 1 million redeterminations in just 14 months. People who don’t receive a notice at the correct address or who need help understanding how to verify their income and can’t get through to anyone could lose their health insurance even if they still qualify, a problem known as “red tape losses.”

The state sent out a test mailing to all 860,000 households with medical benefits in the fall of 2022, tracked returned mail, and learned that it had the wrong address for about one in 10 households. Through outreach, the two state agencies got updated information for 17,000 families. That leaves about 64,000 households the state isn’t sure how to reach.

The state has also shored up support for the call center that will take questions and support people going through the redetermination process. It hired a contractor to handle some of the workload, which has added about 150 staff.

The call center, though, is a major point of risk, according to a March report from OHA to the Legislature. And the new contractors likely won’t be enough to address the problem. Wait times are already two to three hours, and they are expected to increase dramatically as the renewal process kicks off.

Finally, the process may be particularly challenging for seniors. Some people who turned 65 during the public health emergency may have to move off of Medicaid and on to Medicare for the first time.

That switch could leave some seniors paying significantly more for their health care and prescriptions, and dealing with new bureaucracies to try to qualify for benefits and discounts.

The federal insurance program for seniors generally has higher co-pays and less generous benefits than Medicaid.

“We’re doing everything we can to prevent people from falling through the cracks,” OHA spokesman Robb Cowie said.

Who gets to keep medicaid coverage?

State officials are particularly concerned about the so-called Medicaid churn population. That’s about 55,000 adults who make between 138% and 200% of the federal poverty level. They bounce between qualifying for Medicaid and subsidized plans on the insurance ACA marketplace when their income goes up or down a little, and are more likely to be uninsured.

Pointing to a 10% increase in the insurance rate for this group and a reduction in churn during the pandemic, leaders at the state health authority have asked for a federal waiver to allow them to temporarily stay on Medicaid, during the redetermination process.

Income limits for Medicaid programs vary. The most generous coverage is for children, who qualify if their family’s income is up to 300% of the federal poverty level. In 2023, that would be $90,000 for a family of four.

(Chart via HealthCare.gov)
Oregon also has special programs that make Medicaid available to many adults in treatment for breast cancer and for young adults who were in foster care.

Currently, most adults qualify for the Oregon Health Plan if they make up to 138% of the federal poverty level. That will continue to be the income threshold for people submitting new applications for state-funded health insurance.

However, if the federal government grants Oregon’s requested temporary Medicaid expansion, people who are currently enrolled will be able to remain covered if their incomes are under 200% of the federal poverty level. A single adult, for example, could earn up to $29,160 annually, and not lose their coverage.

The current estimate of the cost of the temporary Medicaid expansion is $76 million from the state’s general fund and $116 million in federal funds, for 2023-2025. As of April 3, the Oregon Health Authority was still waiting on federal approval of the proposed expansion. The agency expects to have that approval by May 1, according to Cowie.

“We’re hopeful we’ll get federal approval. But we do not have an agreement yet,” he said.

For those who stay on Medicaid, longer eligibility windows There’s a silver lining for every Oregonian who does qualify to stay on Medicaid: Longer periods of eligibility are also kicking in during this renewal process.

Infants and young children will now remain on the plan until their 6th birthday, regardless of changes to their family’s income. Children 6 and older and adults will be able to stay on the Oregon Health Plan for two years at a time, regardless of income changes.

Oregon is the first state in the nation to provide continuous Medicaid eligibility during early childhood and it’s a particularly profound change given the number of kids on Medicaid. About half of all children in Oregon are covered by Medicaid.

Marris Alden is with the Oregon Primary Care Association, a nonprofit that represents many of the clinics that provide care to Medicaid members in Oregon.

Alden said completing the paperwork for benefit programs can add up to a substantial workload for poor families. The longer enrollment period will save them time and stress and increase the chances kids get to see a doctor.

“Those first five years are so important to child development. It’s extraordinary, and I think we’ll see that reflected in health outcomes in the future,” Alden said.

Risky attempt at a permanent fix

Longer term, the state health authority is seeking state and federal approval to launch a Basic Health Program, a public option similar to Medicaid for people whose incomes would usually be just above the threshold, and who currently qualify for subsidized individual plans through the Affordable Care Act.

Like Medicaid, the plan would be administered by coordinated care organizations, and it would be free with no out of pocket costs for the people on it.

Oregon has proposed launching the Basic Health Program in July 2024, initially just for the 55,000 people who were kept on Medicaid through the temporary expansion. In January 2025, it would move people making 138% to 200% of the federal poverty level out of the Affordable Care Act marketplace and onto the state’s Basic Health Program.

But it’s unclear whether that idea will become a reality. It will require some ongoing investment from the state’s general fund to administer the new program, and approval from the state’s federal partner, the Centers for Medicare & Medicaid Services, which would provide the majority of the funding.

In public comments submitted last fall, two of the largest health providers in the state, Providence Health & Services and Kaiser Permanente, said they oppose creating the Basic Health Program.

They estimate it would eventually remove about a quarter of enrollees from the ACA marketplace, destabilizing it and increasing the out-of-pocket costs for the remaining people purchasing plans through the marketplace.

A legislative task force has recommended the state move forward with the Basic Health Program concept. However, the task force report also found that creating the Basic Health Program will affect the marketplace in complex ways that will hurt a significant number of people purchasing their health insurance there, leading to higher monthly premiums for some people and causing others to switch to less generous plans with higher deductibles.

It’s unclear how the state plans to address those problems. The health authority is currently seeking approval from a key state oversight board to submit plans for a bridge plan for federal approval in July.