States Should Use Federal Matching Funds to Ensure Adequate Staffing During “Unwinding” of Medicaid Continuous Coverage

State Medicaid agencies should use federal Medicaid funding to address the staffing crisis they’re in, just as eligibility workers and call center staff are about to experience a significant rise in their volume of work. These staff will be restarting the process of conducting full renewals and eligibility determinations of historically high caseloads as states “unwind” from the continuous coverage provision, which as of April 1 will no longer protect people from losing their Medicaid coverage as it did through nearly three years of the pandemic.

One in four state Medicaid agencies are reporting a workforce vacancy rate of 20 percent and some are seeing rates as high as 50 percent. Staffing shortages ― even before pre-pandemic eligibility processes resume ― increase the risk that eligible people will lose Medicaid coverage when unwinding begins. If state agencies lack sufficient staff to answer phones and process eligibility paperwork, people who need to renew coverage for themselves and their families during unwinding could have trouble getting questions answered and taking the necessary actions to secure their coverage.  

The good news: federal funding through Medicaid’s regular structure is available to help states hire more people, raise wages, temporarily bring back retired caseworkers, and pay overtime. State Medicaid agencies should review their current claiming of federal matching funds and make sure they’re using the 75 percent enhanced federal matching rate for eligibility workers to bolster staffing and ensure they have the capacity to handle the work ahead.

Medicaid provides different matching rates to states for administrative work associated with operating the program. Most administrative costs are matched at 50 percent but some qualify for an “enhanced” match, including a 75 percent match for certain services that will be particularly needed as states begin to resume full eligibility determinations. 

Costs that are eligible for the 75 percent match include:

• application intake and acceptance;
• eligibility determinations and notifications;
• renewals and customer service functions such as call center activities; and
• staff training to conduct these activities.

The Medicaid continuous coverage requirement, in place since March 2020, has prevented states from ending coverage for most enrollees during the pandemic; in exchange for maintaining coverage, states received a 6.2 percentage point increase in their federal matching funds. This means that state Medicaid agencies haven’t needed to conduct typical eligibility reviews of their caseloads for nearly three years. But with a continuous coverage end date of March 31, state agencies are beginning to unwind this pandemic-era policy and can begin terminating coverage for enrollees as early as April 1. States have 14 months to complete their renewals, and all states must finish by May 31, 2024.

In the renewal process, Medicaid enrollees could face challenges at multiple points and lose coverage despite remaining eligible. People seeking to renew their Medicaid coverage encounter many administrative burdens, which fall disproportionately on people of color. Often, these administrative burdens lead to eligible individuals losing coverage.

Coverage losses will be exacerbated if understaffed Medicaid agencies struggle to answer calls or field questions, or if they fall behind in processing paperwork in a timely manner but proceed with terminations (contrary to federal rules). After the first round of coverage terminations, many who lose Medicaid will reapply, further straining agencies. If Medicaid agencies don’t have sufficient staffing, eligible enrollees who lose coverage at renewal will face long delays in regaining coverage, when even short coverage disruptions can be harmful.

The staffing pinch at state Medicaid agencies may well be worse than vacancy rates reflect. Medicaid agencies reported an average vacancy rate of 17 percent, according to the National Association of Medical Directors. But this rate only reflects how far an agency is below its allocated staffing level, which is often well below what’s needed to provide good customer service and process applications and renewals on time. State agencies have also faced high turnover and changes to their skilled workforce throughout the pandemic — some states report that 20 percent of their workforce has never conducted a Medicaid renewal under regular operations.

These workforce challenges have made it difficult for states to stay on top of their existing work, with recent reports of calls going unanswered and agencies falling behind on processing applications. Regulations require that renewals be completed within 45 days, but in April to June of 2022 (the latest period for which such data are available), nine states reported at least one month with 20 percent or more of their applications taking longer than that. And this is before unwinding has even begun.

Even if state agencies can’t improve staffing before the unwinding process begins, it’s not too late to invest in stronger staffing. Addressing staffing shortages now is critical to improve customer service and minimize coverage loss of eligible enrollees.