Texas lawmakers are considering legislation that would prevent state Medicaid administrators from automatically renewing recipients without contacting them to make sure that they qualify for the program.
Senate Bill 921 would benefit Texas Medicaid recipients by slowing the program’s movement toward insolvency. More than four million Texans are currently enrolled in Medicaid. Skyrocketing Medicaid costs threaten to devour all discretionary spending in the state.
During the pandemic, Medicaid enrollment nationally ballooned by 23 million people, to 95 million, as eligibility requirements were relaxed and the federal government gave states enhanced payments to load more people onto the program and keep them there. With the COVID-19 emergency long over, the federal government now allows states to disenroll people who do not qualify.
“Almost all” those who should be removed are eligible for state-supported insurance exchanges, employer-sponsored health insurance, or Medicaid itself through redetermination, according to the Urban Institute. To provide care for those who truly need it and make insurance premiums more affordable for businesses and families who pay for private health insurance, Texas must stop paying for people who do not qualify for Medicaid because they make too much money, live in another state, or are dead. The state should transition them to alternative health insurance options.
Senate Bill 921 would reform determinations to verify eligibility of Medicaid enrollees. In a state with more than four million people on Medicaid, and total annual spending of more than $40 billion on the program, the Texas Attorney General’s office estimated Medicaid fraud cost the state’s taxpayers $4 billion in 2023. The vast majority of wasted dollars go to insurance companies to pay for Medicaid policies for people who do not qualify.
According to CMS data, $80.6 billion was improperly spent on Medicaid in 2022, and a staggering $98 billion in 2021, with the vast majority of the improper payments being attributed to lack of eligibility. Total improper payments decreased to an estimated $31.1 billion in 2024 as states began to cycle ineligible people off the program after the federal ban on disqualifications was lifted. Preventing the automatic renewal of recipients is an essential first step in the verification process.
Evidence from other states confirms establishing a robust eligibility verification system can significantly decrease Medicaid fraud and abuse. After the Illinois Department of Healthcare and Family Services launched the Illinois Medicaid Redetermination Project in 2012, the Prairie State removed 400,000 ineligible recipients and saved an estimated $350 million per year.
SB 921 would similarly help retrieve taxpayer money spent improperly in Texas. The legislation would establish that the state’s Health and Human Services Commission or any other “state agency that administers any part of Medicaid” “may not conduct an ex parte renewal of a recipient’s Medicaid Eligibility” unless “expressly required by federal law.” The bill defines “ex parte renewal” as “a redetermination of a recipient’s Medicaid eligibility that is conducted automatically without requiring information from the recipient using information from verifiable electronic data sources or that is otherwise available to the commission.”
Making contact with Medicaid enrollees just makes sense. States should find ways to communicate meaningfully with Medicaid recipients to help improve their overall care and determine their eligibility for scarce resources. It is unfair to give taxpayer money to people who do not qualify for it, as such payments divert resources from the truly needy and jeopardize the program’s fiscal viability, putting eligible recipients in danger of harsh future cuts to their access to health care.
Medicaid recipients benefit from an effective eligibility determination process.
The following documents provide useful information about Medicaid eligibility determinations.
Texas Senate Bill 921 would prevent state Medicaid administrators from automatically renewing recipients without contacting them to make sure that they qualify for the program. “Except as expressly required by federal law, the commission or a state agency that administers any part of Medicaid may not conduct an ex parte renewal of a recipient’s Medicaid eligibility,” the legislation states. The bill would prevent “redetermination of a recipient’s Medicaid eligibility that is conducted automatically without requiring information from the recipient using information from verifiable electronic data sources or that is otherwise available to the commission.”
Ineligible Medicaid Enrollees Are Costing Taxpayers Billions
Hayden Dubois and Jonathan Ingram of the Foundation for Government Accountability detail the scale of improper Medicaid payments based on enrollment eligibility problems.
In a report on the exposure of a corporate fraud scheme, Texas Attorney General Ken Paxton documents the extent of Medicaid fraud in the state: “In Texas, Medicaid costs taxpayers over $40 billion. Federal and industry authorities estimate that fraud comprises up to ten percent of the costs of the Medicaid program, making Medicaid fraud a $4 billion problem in Texas.”
HHSC Resumes Medicaid Eligibility Redeterminations as Continuous Coverage Requirement Ends
“The Texas Health and Human Services Commission is resuming eligibility redeterminations for approximately 5.9 million Medicaid recipients now that the federal Medicaid coverage requirement ended March 31,” the state’s HHS department announced on April 3, 2023. “Federal guidance requires states to conduct a renewal determination for all Medicaid recipients over a 12-month period, and HHSC anticipates it will complete this process by May 2024.” (Legislation such as SB 921 is necessary to ensure the eligibility verification process continues.)
Stakeholder Update: COVID-19 Medicaid and Chip Services
The Texas Department of Health and Human Services outlines its plan to end continuous coverage in Medicaid and resume enrollee eligibility redetermination.
October 2024 Medicaid & CHIP Enrollment Data Highlights
The Centers for Medicare and Medicaid services provides a snapshot of Medicaid and CHIP enrollment and of eligibility operations.
American Health Care Plan: State Solutions
Researchers from The Heartland Institute explain what states can do to make health care more accessible and affordable while awaiting a comprehensive federal plan to replace the current outdated, wasteful, access-denying, government-warped health care system. The authors recommend states take steps to verify Medicaid eligibility of program recipients.
10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision
The health care research organization KFF examines options for states in the wake of the lifting of the federal government’s emergency pandemic restrictions on Medicaid eligibility redetermination.
Louisiana Plans to Spend $196 Million to Check Medicaid Enrollees’ Status
The Louisiana Illuminator reports on then-Gov. John Bel Edwards’ March 2023 proposal to spend $195.8 million to reach out to Medicaid enrollees and check whether they meet the qualifications for the public health insurance program during a massive Medicaid disenrollment over the next year.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this and other topics, visit the Health Care News website and The Heartland Institute’s website.
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S. T. Karnick
S. T. Karnick is a Senior Fellow at The Heartland Institute.
S. T. Karnick is a senior fellow and director of publications for The Heartland Institute.
