Medicaid Coverage Restored for Thousands After Computer Errors in Many States

Federal officials say about 500,000 Medicaid recipients who recently lost coverage are having their health insurance restored after state computer systems failed to appropriately handle their eligibility reviews.

All states are undertaking a massive examination of Medicaid rolls — the first such review since the federal government lifted a pandemic-era moratorium on removing people from the program.

In many states, the first step involves using computer programs to determine whether people can be automatically re-enrolled in Medicaid. If their eligibility is unclear, then people are sent renewal notices asking for further information before being dropped from the rolls.

Federal officials say eligibility is supposed to be reviewed for each individual in a household, because children often have higher income eligibility thresholds than adults.

The federal Centers for Medicare and Medicaid Services sent a letter to all states last month asking them to verify compliance with this federal rule.

CMS officials said Thursday that 29 states and the District of Columbia had conducted automated eligibility reviews for entire households instead for individuals. That means some people — primarily children — may have been inappropriately dropped from Medicaid.