Perceived Medicaid Eligibility and Procedural Denials

• In Event: Administrative Frictions in US Health Insurance: Evidence on Coverage Loss, Claim Denials, and Eligibility Churn

Abstract

Medicaid members, like beneficiaries of many public programs, must periodically go through an eligibility redetermination process which typically requires responding to notices and requests for information in a timely manner. For those who successfully navigate them, this represents a time cost or administrative burden, part of the price of public coverage. For others, incomplete or mistaken paperwork can result in procedural denials, i.e. a loss of coverage without an eligibility determination. In recent years, procedural denials represent a majority of all coverage loss in Medicaid. Such denials may be innocuous if they are largely driven by beneficiaries who, understanding they are ineligible, choose not to pursue the burdensome process of redetermination. On the other hand, denials could also affect potentially eligible beneficiaries. To understand what procedural denial rates tell us, we need to know how many people skip the renewal process because they expect to be ineligible. We use a unique survey of Wisconsin Medicaid members matched to administrative enrollment data to show that beliefs are highly predictive of coverage loss, with approximately three quarters of people who believe themselves eligible remain enrolled, while just one in five who believe themselves ineligible remain enrolled.  We then show that half of those who experienced procedural denials believed themselves eligible shortly before redetermination. We examine the characteristics that are predictive of eligibility expectations as well as whether the role of beliefs in re-enrollment changes after an increase in automatic renewal rates.  These findings suggest that a significant fraction of procedural denials may be an intentional result of member beliefs about (in)eligibility, such that procedural denial rates are not necessarily an appropriate independent indicator of administrative burden, while also confirming that some who believe themselves eligible are procedurally screened out, supporting the case for streamlining renewal processes for members who are likely to have ongoing eligibility.

Author

• Laura Dague, Texas A&M University
  Presenting Author