Two-Thirds of People Evade Coverage After Medicaid Disenrollment

February 01, 2023 - In a year after Medicaid disenrollment, about two-thirds of people had a period of uninsurance, according to a recent analysis from Kaiser Family Foundation (KFF).

The Families First Coronavirus Response Act (FFCRA) required Medicaid programs to keep people continuously enrolled in exchange for federal funding, leading to significant increases in Medicaid enrollment during the pandemic and, therefore, decreases in the uninsured rates.

However, the temporary continuous enrollment required is slated to end on March 31, 2023, with enhanced federal Medicaid matching funding to follow that year. Millions of people could lose Medicaid, causing more people to become uninsured this year.

KFF analyzed pre-pandemic data from the 2016 through 2019 us Medical Expenditure Panel Survey (MEPS) to determine the extent to which people enroll in and retain other coverage in a year following disenrollment from Medicaid and Children's Health Insurance Program. Most people had a period of uninsurance, with 17 percent remaining uninsured for the full year.

The analysis found that 16 percent of people had another source of coverage sometime during that year, and 33 percent eventually re-enrolled in Medicaid or CHIP before the end of that year.

Just 35 percent of Medicaid/CHIP enrollees maintained coverage during the full year after disenrollment, KFF reported. Most of these people enrolled in another source of coverage for the full year (26 percent), while the others had another source of coverage for some of the year but also re-enrolled in Medicaid/CHIP before the year ended (9 percent).

The findings indicate that “many people do not transition to and retain other coverage after they disenroll from Medicaid/CHIP,” KFF said.

Researchers also estimated that between 5 million and 14 million will lose Medicaid coverage when states have to unwind the continuous enrollment provision later this year.

“Beginning April 1, 2023, states can resume disenrollments for the first time since March 2020,” KFF stated in the analysis. “Some of the people who will be disenrolled during the unwinding will be ineligible and will become uninsured if they do not transition to other coverage. Others will lose coverage for administrative reasons despite still being eligible.”

A major difference between people facing typical Medicaid disenrollment and those who will be disenrolled after pandemic-era provisions expire is that continuous enrollment led to more Medicaid enrollees also being enrolled in private insurance. This should reduce some coverage disruptions in 2023, KFF predicted.

Unwinding continuous enrollment will have several consequences, including lost revenue for providers, the Commonwealth Fund reports.

“Grant funding, while vital, represents only a small fraction of operating revenue; Medicaid is a key source of funding. Revenue loss could grow if states also eliminate telehealth services tied to the [public health emergency], which many beneficiaries depend on. Lost Medicaid revenue will coincide with the loss of supplemental pandemic-related grant funding for safety-net providers, as no new provider relief funds have been approved in 2022.”

Patients will also lose access to specialized care through provider networks tied to their membership in managed care plans, Commonwealth Fund says.

“Patients’ relationships with core safety-net providers will survive because these providers have a mission to serve patients regardless of insurance status or ability to pay. But getting specialized off-site care, such as advanced cardiac services or mental health and addiction treatment, will be a struggle.”

Commonwealth Funds says the “stakes are high” since 90 percent of community health centers expect their patients to forgo care if they lose coverage.