Why Medicaid Coverage Ends: Key Reasons & Tips 2025.

Key Points

• Research shows Medicaid cancellations often occur due to income changes, paperwork issues, or moving states, with recent data highlighting procedural terminations during the unwinding of continuous enrollment post-COVID-19.
• It seems likely that failing to renew coverage or report changes can lead to coverage loss, especially after policy shifts ending in March 2023.
• Evidence suggests state-specific rules impact eligibility, with fraud and voluntary termination also contributing, though less commonly.
  
  
  
  
  
  
  

Introduction

Medicaid is a vital government health insurance program for low-income individuals and families in the US, covering millions. Understanding why coverage might end helps people stay insured or find other options. Recent changes, like the end of continuous enrollment in March 2023, have led to more cancellations, especially due to procedural reasons like missed paperwork.

Main Reasons for Cancellation

Medicaid can be canceled for several reasons, including:

Changes in Eligibility

• Income or assets exceeding limits, family changes, moving states, aging out, or not meeting work requirements (where applicable).

Procedural Issues

• Not completing renewal forms, missing documents, or failing to report changes.

Other Causes

• Fraud, abuse, or choosing to end coverage voluntarily.

Recent Policy Impacts

Since March 31, 2023, states have resumed regular eligibility checks after the COVID-19 continuous enrollment ended, leading to many cancellations due to paperwork issues, even if people are still eligible, affecting access to care.

What to Do If Coverage Ends

If you get a cancellation notice, read it carefully, check if you’re still eligible, and act quickly—appeal or provide missing info. If no longer eligible, explore options like employer plans or marketplace coverage.

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Detailed Survey Note on Reasons for Medicaid Cancellation

This article explores why Medicaid coverage might end, focusing on recent research and policy changes, especially after the end of continuous enrollment post-COVID-19. Medicaid, a joint federal and state program, provides health insurance to low-income individuals and families, covering about 84 million people as of recent estimates. Understanding cancellation reasons is crucial for enrollees to maintain coverage and access healthcare, particularly given recent shifts as of April 6, 2025.

Background and Importance

Medicaid eligibility depends on factors like income, assets, family size, and residency, with periodic renewals needed to keep coverage. Knowing why coverage ends helps enrollees take steps like timely renewals or reporting changes to avoid losing insurance. This is especially important after the continuous enrollment provision ended on March 31, 2023, leading to significant coverage changes.

During the COVID-19 pandemic, the Families First Coronavirus Response Act (FFCRA) of 2020 prevented states from ending coverage except in cases like moving out of state, death, or voluntary cancellation in exchange for more federal funding. This ended in March 2023, stopping the usual "churn" where people frequently lost and regained coverage due to short-term changes or paperwork issues. After this, states resumed regular checks, increasing cancellations, with estimates suggesting 8 to 24 million could lose coverage, as reported by KFF.

Detailed Reasons for Cancellation

Reasons for Medicaid cancellation fall into three main categories: changes in eligibility, procedural issues, and other causes. Each is explored below with examples supported by recent data.

A. Changes in Eligibility

This happens when someone no longer meets Medicaid’s criteria due to personal or financial changes. The reasons include:

1. Income Exceeds the Limit

• Explanation: Medicaid eligibility is based on income compared to federal poverty levels, which vary by state and household size. If income rises, like getting a new job, someone might exceed the limit. For example, a single adult in a state with a 138% federal poverty level limit (expanded Medicaid) might lose coverage if their income goes over.
• Data: Studies suggest income changes cause about 60% of cancellations, as noted by Mira Health.
• Example: Someone gets a raise, and their household income now exceeds the state’s limit, leading to ineligibility.

2. Assets Exceed the Limit

• Explanation: Some groups, like those in long-term care or with disabilities, face asset tests. Owning too much, like extra property, can lead to cancellation. Asset limits vary, often around $2,000 for individuals in non-expansion states for certain programs.
• Example: An elderly person inherits money, pushing assets over the limit, and loses Medicaid for long-term care.

3. Change in Family Composition

• Explanation: Events like marriage, divorce, or a new child can change household income and size, affecting eligibility. For instance, a spouse’s income might push the household over the limit.
• Example: A single parent marries someone with a high income, and the combined income exceeds Medicaid thresholds.

4. Moving to a Different State

• Explanation: Medicaid is state-specific, with each state setting its own rules. Moving requires reapplying, and if the new state has stricter rules or the person doesn’t reapply in time, coverage ends.
• Data: About 1 in 10 Medicaid enrollees moved in-state in 2020, as per KFF, highlighting mobility as a factor.
• Example: A family moves from California to Texas and doesn’t reapply for Medicaid in Texas within the required timeframe, losing coverage.

5. Aging Out of Certain Categories

• Explanation: Children covered under Medicaid may lose eligibility at age 19 if they don’t qualify under adult categories, which often have different income thresholds, especially in states without expanded Medicaid.
• Example: A 19-year-old loses child Medicaid coverage and doesn’t qualify for adult coverage due to parental income.

6. Failure to Meet Work Requirements

• Explanation: Some states require able-bodied adults without dependents (ABAWDs) to work a certain number of hours. Not meeting this can lead to cancellation. This is controversial, with legal challenges, and not all states implement it.
• Example: An enrollee in a work-requirement state fails to document 20 hours of work per week and loses coverage.

B. Procedural Reasons

These involve administrative failures by the enrollee, often during renewals, and have increased post-unwinding, with nearly 70% of recent terminations due to such reasons, as per NACHC. The reasons include:

1. Failure to Complete Renewal Forms

• Explanation: Enrollees must renew eligibility, typically annually, by submitting forms. Not returning these by the due date can lead to automatic cancellation. States may offer grace periods, like Illinois delaying cancellation for 30 days, as seen in Illinois HFS.
• Tip: Set reminders for renewal dates to avoid missing deadlines.
• Example: An enrollee forgets to mail back their renewal form by the mid-month cut-off, leading to cancellation.

2. Failure to Provide Required Documentation

• Explanation: States may request documents like proof of income during renewals. Not providing these within the required timeframe results in cancellation. CMS guidance says states must try to contact before disenrolling if mail is returned, per CMS.
• Example: An enrollee receives a request for pay stubs but doesn’t submit them within 30 days, losing coverage.

3. Not Reporting Changes in Circumstances

• Explanation: Enrollees must report changes like income increases or moves. Failure to do so can lead to incorrect eligibility, and discovery during renewal can trigger cancellation.
• Tip: Update information promptly via state portals like Your Texas Benefits.
• Example: An enrollee gets a new job but doesn’t report it, and during renewal, the state finds out and cancels coverage.

C. Other Reasons

These include less common but significant reasons, often initiated by the enrollee or due to program integrity:

1. Fraud or Abuse of the Program

• Explanation: If someone provides false information, like underreporting income, or misuses benefits, coverage can be canceled. This involves investigations and may lead to legal consequences.
• Example: An individual is found to have claimed residency in a state where they don’t live, leading to cancellation for fraud.
• Note: This is rare but significant, with states required to report such cases under federal rules.

2. Voluntary Termination

• Explanation: Enrollees can choose to end coverage if they no longer need it, like getting employer-sponsored insurance. This is initiated by the enrollee, not the program.
• Example: A person gets a job with health benefits and requests to cancel Medicaid.
• Note: This is different from involuntary cancellations and reflects personal choice.

Impact of Recent Policy Changes

The end of continuous enrollment on March 31, 2023, marked a shift, with states resuming regular eligibility checks. This unwinding process, tracked by CBPP, has increased coverage losses, many due to procedural reasons rather than ineligibility. For example, states like Alaska and Missouri have renewal backlogs, suggesting administrative challenges. Data from KFF estimates 8-24 million could lose coverage, with 60% potentially due to procedural issues, as per Mira Health. HHS has taken steps to minimize avoidable losses, as seen in CMS press releases.

What to Do If You Receive a Cancellation Notice

Getting a cancellation notice can be stressful, but here are steps to take:

1. Read the Notice Carefully

• Understand the reason, like procedural failure or ineligibility, and note deadlines. For example, Legal Aid Justice Center notes you have 90 days to return renewal packages if terminated for procedural reasons.

2. Determine If You Still Meet Eligibility Criteria

• If you think you’re still eligible, provide the missing information or appeal. States must check eligibility for all programs, and coverage can be back-dated if approved, per Legal Aid Justice Center.

3. Explore Other Health Insurance Options

• If no longer eligible, consider employer plans, Affordable Care Act marketplace plans (apply within 60 days post-termination, per HealthCare.gov), or Medicare if 65 or older.

4. Stay Informed

• Keep track of important dates and respond promptly to state requests using state portals like Your Texas Benefits for updates, or visit Medicaid Enrollment & Spending Growth: FY 2024 & 2025.

Conclusion and Recommendations

As of April 6, 2025, Medicaid coverage remains dynamic, with ongoing impacts from the unwinding process. To avoid cancellations, enrollees must stay informed about eligibility, understand renewal processes, and report changes promptly to avoid cancellations. Regularly updating contact information and setting reminders for renewals can help. For assistance, visit state Medicaid websites or contact local social services offices to ensure access to healthcare remains uninterrupted.

Table: Summary of Medicaid Cancellation Reasons and Examples

Category	Sub-Reasons	Examples
Changes in Eligibility	Income exceeds limit	Person gets a raise, income now over threshold.
	Assets exceed limit	Elderly inherit money, assets above the limit for long-term care.
	Change in family composition	Marriage adds the spouse’s income, exceeding household limit.
	Moving to a different state	The family moves, doesn’t reapply in a new state in time.
	Aging out	The child turns 19, loses coverage, doesn’t qualify as an adult.
	Failure to meet work requirements	The enrollee doesn’t document required work hours in a work-requirement state.
Procedural Reasons	Failure to complete renewal forms	Forgets to mail back renewal form by deadline.
	Failure to provide required documentation	Doesn’t submit requested pay stubs within 30 days.
	Not reporting changes	Gets new job, doesn’t report, discovered during renewal.
Other Reasons	Fraud or abuse	Found to have claimed false residency; investigated and canceled.
	Voluntary termination	Person gets employer insurance, requests to cancel Medicaid.