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Marketplace enrollment surges among those losing Medicaid coverage during unwinding

15 Feb 2024 4:13 PM | Addie Thompson (Administrator)

As readers of Say Ahhh! know, I have been tracking monthly data (hereherehereherehere and here) from the Centers for Medicare and Medicaid Services (CMS) on the number of people who were either previously enrolled in Medicaid or had experienced a denial or termination during unwinding who then selected a marketplace plan.  At the end of January, CMS issued new data for October 2023.  (For an overall status update on Medicaid unwinding, see this blog from my CCF colleague Joan Alker.)

In September, another 1.62 million people lost their Medicaid coverage due to unwinding of the Medicaid continuous coverage protection, of which 68.9 percent were procedural disenrollments and 31.1 percent were due to a finding of ineligibility.  Separately, CMS reported that nearly 393,000 people who were either previously enrolled in Medicaid in federal marketplace states or had experienced a denial or termination in state-based marketplace states selected a marketplace plan in the same month.  That constituted about 24.3 percent.

Compared to total marketplace enrollment among those losing Medicaid in September, October marketplace enrollment was nearly 77 percent higher.  (Virtually all of this marketplace enrollment increase occurred in federal marketplace states.)  As a result, the rate of marketplace enrollment among those disenrolled from Medicaid increased substantially, compared to only 13.4 percent in September. (In addition, another 36,000 or 2.2 percent enrolled in a Basic Health Plan in New York and Minnesota in September, with nearly all of that BHP enrollment occurring in New York.)  Cumulatively, through October 2023, compared to the 10.8 million people disenrolled from Medicaid, about 1.4 million or still only 13.3 percent enrolled in marketplace plans.  (The figure rises to 15.1 percent if including Basic Health Plan enrollment.)

As each of the blogs about previous CMS data releases noted, to provide context to these figures, last year, federal researchers from the HHS Office of Assistant Secretary for Planning and Evaluation (ASPE) projected that of the 15 million people expected to lose Medicaid during the unwinding, nearly 2.7 million people — or about 18 percent —would be eligible for subsidized marketplace coverage.  While this data represents only the outcome of unwinding through October, it indicates that overall transitions to marketplace coverage is still falling short of the expected pace.  This is despite overall marketplace enrollment soaring to a historic high of 21.3 million during the 2024 Open Enrollment Period and the welcome surge in successful marketplace transitions for those disenrolled from Medicaid in October.

Moreover, at the current pace of disenrollments, the total number of people disenrolled from Medicaid once unwinding is completed is highly likely to far exceed the original 15 million projection from ASPE, and even the 17 million projection from other analysts such as KFF.  And the share of total disenrollments that are procedural terminations — 71 percent according to our latest data — is well above the 45 percent estimate from the ASPE projections of the number of eligible people disenrolled for procedural reasons.  Finally, for children losing Medicaid, even with the enhanced marketplace subsidies, children accounted for only about 9 percent — or 1.55 million — of total marketplace enrollees during the 2023 Open Enrollment Period.  (Data on the child share of marketplace enrollees during the 2024 Open Enrollment Period is not yet available.)

Marketplace plans will be a valuable source of affordable, comprehensive health coverage but only for a relatively modest number of people, especially children, who lose their Medicaid coverage during unwinding.  Instead, it’s critical for state Medicaid programs, as they complete the unwinding process in coming months, to reduce the persistently high rates of procedural terminations for children, parents and other adults, many of whom, especially children, are likely to remain eligible for Medicaid.  This includes states continuing to increase ex parte renewal rates, ensuring full compliance with all federal requirements for Medicaid renewals and taking up more of the renewal flexibilities provided by CMS, such as pausing all Medicaid renewals for children for one year as Kentucky and North Carolina have recently done.

At the same time, to increase child Medicaid enrollment to offset these large coverage losses from unwinding, states should also take up various actionable strategies to promote continuous coverage for children and families, as recently reinforced in a CMS Informational Bulletin issued in December.  States should also take up multi-year continuous eligibility for children, which an increasing number of states are adopting, in addition to successfully implementing mandatory 12-months continuous eligibility for children which took effect on January 1, 2024.  Finally, states and the federal government will need to work together on robust outreach and enrollment efforts in 2024 to target eligible children, families and other adults who were disenrolled for procedural reasons so they can be reenrolled in Medicaid as quickly as possible.


Contact

Jritchie@scalliance.org
803-256-9003
PO Box 2573
Columbia, SC 29202

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