Pandemic boosts Medicaid enrollment
The pandemic-caused recession and a federal requirement that states keep Medicaid beneficiaries enrolled until the national emergency ends swelled the pool of people in the program by more than 9 million over the past year, according to a report released this month.
The latest figures show Medicaid enrollment grew from 71.3 million in February 2020, when the pandemic was beginning in the U.S., to 80.5 million in January, according to a Kaiser Family Foundation analysis of federal data. (Kaiser Health News is an editorially independent program of Kaiser Family Foundation.)
That’s up from about 56 million in 2013, just before many states expanded Medicaid under the Affordable Care Act. And it’s double the 40 million enrolled in 2001.
Medicaid, once considered the ugly duckling compared with the politically powerful and popular Medicare program, now covers nearly 1 in 4 Americans.
Together, Medicaid and Medicare cover 43 percent of Americans.
More than three dozen states since 2014 have used billions in ACA funding to expand coverage beyond traditional Medicaid populations to cover adults with incomes below
138 percent of the federal poverty level, or about $17,800. At the end of 2020, 14.8 million newly eligible adults were enrolled in Medicaid because of the ACA.
States that have seen at least an 80 percent increase in Medicaid enrollment since 2013 are Kentucky (157 percent), Nevada (129 percent), Alaska (94 percent), Colorado (92 percent), Montana (88 percent), Oregon (85 percent) and New Mexico (80 percent).
Although Medicaid has often been criticized for having too few physicians who accept its low reimbursement rates, state officials
say they have weathered the surge with few complaints from enrollees about accessing health services. One reason is the drop in people seeking medical care during the pandemic because they were mitigating their risks of contracting COVID. Doctors were able to fit in more patients efficiently through telehealth appointments after federal rules expanded reimbursement for those services.
Typically, a surge in Medicaid enrollment can cripple state budgets, but a COVID relief package passed by Congress last year boosted the federal share of its funding for traditional Medicaid by
6.2 percentage points. Before the pandemic, Washington paid on average about 56 percent of Medicaid costs, with poorer states getting a larger share.
However, the funding hike required that states not remove anyone from the program during the public health emergency unless they die or move out of state. The increase in federal contributions does not apply to enrollees covered by the ACA Medicaid expansion. The federal government already pays for at least 90 percent of their expenses.
Among the winners from the enlarged Medicaid rolls are private health plans, which most states use to cover enrollees. Health plans such as those run by managed-care titans
Unitedhealthcare, Molina Healthcare and Centene Corp. receive a payment from states each month based on enrollment. That means these insurers can profit if they control costs, but they lose money if expenses to treat enrollees are too high.
“We are seeing plans’ revenues go up and utilization of health services decline, which is a recipe for increased profits,” said Massey Whorley, a Medicaid expert with the consulting firm Avalere.
Because of the way they are paid, health insurers benefited financially during the pandemic compared with other major health industry sectors, such as hospitals, physicians and nursing homes forced to stretch budgets for extra staffing and protective gear for workers while their revenues shrank because of waning demand.
Most health experts expect the Biden administration to maintain the nation’s health emergency status until at least the end of the year. Administration officials have said they will give states at least 60 days’ notice before ending the emergency so that states can prepare.
Helping to drive Medicaid enrollment this year was the
Biden administration’s decision to reopen the ACA marketplace from March until Aug. 15. About 331,000 people who applied as part of that special enrollment were eligible for Medicaid or the Children’s Health Insurance Program.