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DHS outlines eligibility checks, counties' role and warns federal changes may reduce coverage
Summary
DHS told lawmakers counties determine individual Medicaid eligibility and that recent federal legislation will require more frequent checks and could reduce enrollment; DHS and county representatives said implementation will add administrative work and may require system upgrades and funding.
Shereen Gandhi and John Connolly of the Minnesota Department of Human Services told a June 24 interim hearing that counties make individual Medicaid eligibility determinations and that eligibility checks rely heavily on electronic data sources.
Gandhi said federal law sets minimum Medicaid eligibility rules and Minnesota county workers use a set of "trusted data sources" to confirm information at renewal and between renewals. She listed several data sources DHS uses to corroborate applications and renewals: Social Security Administration records (to verify Social Security numbers, benefits, citizenship and deaths); the Department of Homeland Security (immigration status); the Internal Revenue Service and Equifax/The Work Number (wage verification); the Minnesota Department of Employment and Economic Development (wages and unemployment); an asset verification service (financial accounts for those subject to asset limits); and Minnesota death records.
Gandhi described renewal procedures: agencies must first attempt to auto-renew with trusted data sources; if that does not confirm eligibility, a renewal form is mailed and nonresponse results in case closure after a 10-day advance closing notice. She said renewals resumed after the pandemic'era continuous coverage ended March 31, 2023, and DHS completed the backlog of renewals by June 2024.
On federal changes, Gandhi said the federal Budget Reconciliation bill signed July 4 imposes new requirements that DHS is still assessing but that DHS estimated could "cut roughly $500,000,000 in annual funding to Minnesota" and that the Kaiser Family Foundation has projected "between 400,000 Medicaid enrollees in Minnesota will lose coverage because of the bill." She said the bill adds six-month eligibility checks, work-reporting requirements for some adults and other changes that increase administrative burdens for counties, hospitals and navigators.
Matt Freeman of the Association of Minnesota Counties told the committee counties will bear much of the administrative workload. Freeman said Minnesota is one of 10 states where counties administer Medicaid eligibility and that prior analyses estimate substantial local fiscal impacts from imposing work requirements. He warned that increased verification steps and older state eligibility systems (SSIS, MAXIS) create operational challenges and increase the likelihood of administrative errors that can close cases for otherwise eligible people.
John Connolly, DHS deputy commissioner and state Medicaid director, said nationally and in Minnesota roughly two-thirds of working-age Medicaid enrollees already work and that a small share would be newly motivated into work by a work requirement. He also said evidence shows administrative hurdles and frequent redeterminations can cause eligible people to drop coverage.
Gandhi and county representatives asked for time to analyze the federal law's specific operational costs and system-change needs; DHS said some federal approvals and contract or system work could take three to six months.
Ending: Committee members asked DHS and counties for follow-up information: (1) counts on how many people the federal changes may affect, (2) specific estimates of additional county workload and cost, (3) managed care audits and reports on MCO-reported fraud detection, and (4) DHS figures for administrative recoveries and unrecovered overpayments.
