Sluggish Renewal Rates Could Cost New Medicaid Recipients Their Coverage

Andrew Kitchenman | October 21, 2015 | Health Care
Success of Medicaid expansion could be undercut by problems reaching recent enrollees

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A “significant” number of the New Jerseyans who picked up health insurance due to the expansion in Medicaid eligibility could lose their coverage if they fail to file renewals, according to the state’s Medicaid director.

Valerie Harr, director of the Division of Medical Assistance and Health Services, said that despite three mailed notices to every resident asking them provide their income and other relevant information to determine whether they are still eligible for coverage, a significant number of residents aren’t responding.

It’s a new challenge for a state system that’s seen significant success in adding to the ranks of the insured through NJ FamilyCare, the state’s primary Medicaid coverage program.

Since Medicaid eligibility expanded in January 2014, the number of state residents in NJ FamilyCare has grown by 466,000, from 1.28 million to 1.75 million. Along with the challenge in enrolling those who remain outside of FamilyCare — and who presumably will be the most difficult to enroll — state officials are looking at how to keep those already insured in the system.

Harr said during a meeting this week of the New Jersey Medical Assistance Advisory Council that many people who joined FamilyCare by applying through the federal health insurance marketplace website,, are not responding to the renewal notices.

Under federal law, the state must annually complete a “redetermination” on whether FamilyCare recipients are still eligible. FamilyCare is open to those with household incomes below 138 percent of the poverty line, currently $16,243 for a single adult and $33,465 for a family of four.

The state sends a renewal application 75 days before the annual redetermination deadline, with follow-up notices sent 60 days and 30 days prior to the deadline. If the state is not able to determine whether the person is still eligible, it sends a termination letter 20 days before the deadline.

In addition, state officials asked representatives with Xerox, which has a contract to coordinate FamilyCare enrollment, to call residents about the applications.

“The individuals say, ‘Well I just didn’t get around to it — I will,’” Harr said. “And they’re not.”

Harr noted that those who are eligible for health coverage but who don’t enroll are subject to tax penalties under the individual insurance mandate of the Affordable Care Act. These penalties will reach the greater amount of $695 or 2.5 percent of income next year.

NJ FamilyCare enrollment grew steadily from January 2014 until April 2015, but has stalled since. That’s raised the concern of Raymond J. Castro, the senior policy analyst for New Jersey Policy Perspective. He wants to the state develop new strategies to regain the momentum and reach these remaining FamilyCare-eligible residents.

“It’s pretty clear that people who have been motivated to apply have already done so,” Castro said. “And so the folks who are remaining are the most difficult to reach and have many, many barriers.”

Castro called for an “even more intensive effort” to reach the remaining low-income uninsured, who he said are probably more vulnerable to health problems than those who are already enrolled.

In other ways, the state has made significant progress. While some county welfare offices had backlogs in enrolling FamilyCare applicants throughout 2014, Harr said that they now report “little-to-no” backlog.

But Harr had no update on state Department of Human Services plan to resolve long-running concerns over building a new computer system to serve recipients of all state-supported services, including NJ FamilyCare. The state currently relies on the FamilyCare website for enrollment, but this site doesn’t serve the wide range of functions that the Consolidated Assistance Support System (CASS) was supposed to address. The state cancelled the CASS contract last year after vendor Hewlett-Packard failed to deliver the system.

Harr said state officials plan to meet with federal officials to discuss a report on what can be salvaged from the CASS project.