I can describe Missouri’s current Medicaid situation in three words: Time is money.
As I wrote last month, our state lagged much of the country in resuming its Medicaid eligibility redetermination processes following the COVID-19 pandemic. Instead of starting in April as many states did, Missouri began processing redeterminations a month ago on July 1. Now that there are three months of data from across the country to look at, a new report from the Paragon Institute estimates just how much Missouri’s foot-dragging might cost.
For a quick refresher, during the pandemic, the federal government barred states from checking whether Medicaid enrollees remained eligible to receive services as they normally would. As a result, Missouri’s program set new records for enrollment and spending. But the catch is that likely more than 20% of those enrolled today aren’t eligible for coverage, so once the federal government allowed redeterminations to resume on April 1, states had significant financial interest in rightsizing their program rolls as quickly as possible.
No, this rightsizing doesn’t mean removing people from the program who are still eligible to receive services. What it means is that states typically pay health plans monthly for each Medicaid enrollee, so if 20 percent of those enrollees are ineligible, just using Missouri’s current enrollment of 1.5 million, that means taxpayers could be paying the health care costs of 300,000 people they shouldn’t be. And that’s really expensive!
So how can Missouri clean up the program’s rolls as quickly and accurately as possible? And how much will it cost if they don’t? That’s what the Paragon Institute report tries to answer.
First, the report estimates how much is being wasted per month on ineligible enrollees. For Missouri, if 20 percent of program enrollees are in fact ineligible, that means more than $120 million is wasted every 30 days. The federal government is giving states 12 months to process all of their redeterminations, but since so much is wasted per month, and since the share of these costs paid by the federal government will be declining each quarter, the sooner the eligibility checks can be completed, the better. The report suggests that if Missouri were to process all 1.5 million redeterminations in 6 months instead of the 12 months allowed, approximately $364 million could be saved.
Additionally, not all current enrollees are equally likely to be ineligible. Paragon suggests states should be prioritizing the redeterminations of the recipients who are most likely to be removed in order to maximize the savings. All told, if Missouri were to follow all of Paragon’s suggestions (other than the ones that can’t be done because it’s too late), our state could end up saving $729 million. That’s no small amount of money.
The Paragon Institute report shows us how much money Missouri’s overpopulated Medicaid rolls are costing the state, and considering how our state Medicaid agency started processing redeterminations three months later than necessary, I’m worried taxpayers are about to watch their money burn. If time really is money, Missourians should keep their eyes peeled for at least the next 12 months.
