Medicaid Coverage Losses Less Likely During First Year of Pandemic

Adults were less likely to lose Medicaid coverage during the first year of the COVID-19 pandemic compared to the year before in 2019, a study published in Health Affairs found.

Between February and April 2020, the unemployment rate in the United States increased from 3.5 percent to 14.7 percent, putting health insurance at risk for many. At the same time, the Families First Coronavirus Response Act of 2020 required states to provide continuous Medicaid coverage for beneficiaries.

Researchers used data from the Medical Expenditure Panel Survey-Household Component (MEPS-HC) to compare the share of people changing coverage sources from 2019 to 2020 with the share who changed coverage from 2018 to 2019.

Among the survey respondents with employer-sponsored health insurance, 6 percent changed coverage sources in 2019, while a similar 6.1 percent switched coverage sources in 2020.

Among people with Medicaid, 14.4 percent lost that coverage from 2018 to 2019, but only 10.7 percent of people lost Medicaid coverage in 2020. More people retained Medicaid coverage in 2020 due to fewer people becoming uninsured; from 2018 to 2019, 7.8 percent of individuals became uninsured compared to 4.3 percent from 2019 to 2020.

Beneficiaries in states that had expanded Medicaid were less likely to become uninsured in 2020 (3.6 percent) than in 2019 (6 percent). Residents in states that had not implemented Medicaid expansion were also less likely to lose Medicaid coverage in 2020 (6.6 percent) than in 2019 (12.4 percent).

Beneficiaries in expansion states were more likely to enroll in Medicaid in 2020 if they were previously uninsured in 2019 (21.5 percent) compared to the 2018 to 2019 period (15.3 percent). There was no significant difference in these findings for beneficiaries in non-expansion states.

Young adults between 19 and 49 and older adults between 50 and 63 both experienced increased stability in Medicaid coverage in the first year of the pandemic. From 2018 to 2019, 12.3 percent of younger adults with Medicaid became uninsured, compared to 6.8 percent from 2019 to 2020.

Similarly, 5.5 percent of older adults with Medicaid in 2018 became uninsured in 2019, while 2.2 percent became uninsured in 2020. In addition, older adults without coverage were more likely to enroll in Medicaid in 2020 (15.2 percent) compared to 2019 (9.2 percent).

Losing Medicaid coverage in 2020 was also less likely in 2019 among workers with a part-time job, those with excellent health status, and those with worse health statuses, the study found.

The findings suggest that potential declines in private coverage due to job losses could have been offset by Medicaid enrollment gains. The Medicaid continuous eligibility policy likely supported this enrollment growth.

“The increased stability of Medicaid coverage from 2019 to 2020 and the increased flow of people from being uninsured to having Medicaid suggests that this policy may have helped stem losses in coverage in 2020,” researchers wrote.

Researchers also found that Medicaid expansion could potentially help people avoid health insurance losses during economic declines.

As the public health emergency has ended and states have resumed processing Medicaid redeterminations, millions of beneficiaries may be at risk of losing coverage.

Data from the Kaiser Family Foundation (KFF) found that Medicaid expansion could help prevent coverage losses during redeterminations. In non-expansion states, 1.9 million individuals have incomes below the federal poverty level but are ineligible for Medicaid coverage.

If these states adopted Medicaid expansion, around 3.5 million people, including the 1.9 million in the coverage gap, could gain health insurance coverage.