Pedram Afshar , 2025-04-16 13:19:00
According to the nonpartisan Congressional Budget office (CBO), 93% of non-Medicare spending goes to Medicaid and the Children’s Health Insurance Program (CHIP). During the next 10 years, these two programs will cost more than $8.2 trillion. The proposed federal plan intends to cut $880 billion — more than 10% of Medicaid and CHIP. Broad cuts strip care from millions of people.
Medicaid is good for communities, yet hospitals operating under razor thin margins will be further strained by these cuts. People without access to Medicaid, or similar programs, may not receive the care they need until their health concern is more acute and requires more costly care options.
By adopting a fresh approach that places the right people in the right programs, including AI-enabled enrollment, health plans, the healthcare industry will be in a better position to weather impending federal cuts – and maybe even end up better for it.
Medicaid cuts hit hard
Simply cutting $880 billion and hoping the “states will figure it out” is not a viable solution, adding administrative overhead in the form of more aggressively gaming the system or hiring people to pore over enrollments and claims. The people most likely to be affected would be those with the fewest resources to obtain health insurance elsewhere, such as from private employers and the federal marketplace.
Analysis from the Urban Institute and Robert Wood Johnson Foundation found that hospitals in 41 states that expanded Medicaid eligibility could lose about $80 billion in 2026 following Medicaid funding cuts. Safety net providers, including Federally-Qualified Health Centers (FQHCs), already work on a tight or negative margin and will be most impacted as they rely on this funding to stay viable.
The outcome to avoid is inappropriately kicking individuals off programs, although recent data shows states doing just that. The state Medicaid redetermination process created an environment where about 72% of disenrollments are due to procedural reasons, including not receiving a renewal notice, as opposed to actually not qualifying.
The Medicaid budget should be balanced in a nuanced way that puts the right people on the right programs. A more effective way to save money for everyone is setting up better data systems for member eligibility and enrollment.
Challenges of an enrollment process already intentionally inefficient
No two Medicaid plans are the same. Neither are their enrollment processes. Not only are these plans reliant on federal funding, but each state operates its own plan – with its own enrollment process, inefficient and difficult to navigate. Enrollment is complicated enough to create whole companies to handle just that.
With cuts to margins and Medicaid, operations need to be as efficient as possible. This means bringing costs down while also increasing revenue for healthcare organizations. For health plans, increasing member retention and reducing churn is paramount. Most Medicaid plans lack visibility in how they support member renewal. Changing regulations increase the importance of understanding where churn occurs to be empowered to address it.
Better processes for improving effectiveness
Hospitals are a great place to make an intervention because patients are already using care and trust the organization. Go beyond the initial enrollment and guide members through the entire renewal process. Technologies including smartphones, APIs to enrollment websites, and AI simplify the entire registration process across programs, while also lowering an organization’s cost-to-enroll and detecting lapses in coverage.
Patients desire a mobile first experience, which helps streamline enrollment and reduce manual steps. Offering a mobile option gives them more control and patients can navigate the process at times that work for them. Having skilled people on hand to assist or answer questions is still good practice, although fewer are needed.
Enrollment counselors can be more efficient thanks to AI-enabled tools that enhance accessibility and unlock additional revenue. AI features can communicate with patients and work on the back end to interact with enrollment websites. This is a new area that will expand as technology is adopted.
Conclusion
Medicaid enrollment challenges are not new. Razor thin margins and cuts to Medicaid make it more important than ever to improve enrollment efficiency. This blend of tech and skilled people give trust in the process.
New technologies and fresh approaches, including recognizing the aggregate value in even smaller wins, create better systems for member eligibility, enrollment, and renewal. The industry will benefit through reducing costs, increasing captured revenue, and keeping people on the right plans.
Photo: designer491, Getty Images
Dr. Pedram Afshar, M.D., Ph.D., is the founder and CEO of Escher Health, a leader in making enrollment in Medicaid and government benefit programs easy for staff and patients. During medical training, he became frustrated to see patients who were eligible for programs, like Medicaid, but not enrolled. Dr. Afshar noticed many problems with the standard enrollment process and set out to create a solution.
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