65% of Beneficiaries Were Uninsured After Medicaid, CHIP Disenrollment

Almost two-thirds of beneficiaries were uninsured for part or all of the year following disenrollment from Medicaid or the Children’s Health Insurance Program (CHIP), an issue brief from the Kaiser Family Foundation (KFF) found.

The Families First Coronavirus Response Act (FFCRA) required Medicaid to keep beneficiaries continuously enrolled in the program during the COVID-19 pandemic. However, the continuous enrollment provision ends on March 31, 2023, and states must resume Medicaid eligibility determinations.

Millions of individuals are projected to lose Medicaid coverage during the unwinding process.

KFF researchers used pre-pandemic data from 2016 to 2019 from the Medical Expenditure Panel Survey (MEPS) to assess how many people enrolled in and retained other coverage during the 12 months after disenrollment from Medicaid or CHIP.

Nearly two-thirds of beneficiaries (65 percent) were uninsured at some point after being disenrolled from Medicaid or CHIP. Seventeen percent of individuals were uninsured for the full year and 16 percent were uninsured for some of the year and had another source of coverage at one point.

A third of beneficiaries were uninsured after disenrollment but eventually re-enrolled in Medicaid or CHIP before the end of the year, known as churning.

The 35 percent of beneficiaries who did not experience uninsurance after disenrollment included 26 percent who were enrolled in other coverage for the entire year and 9 percent who had another source of coverage for part of the year but re-enrolled in Medicaid or CHIP before the year ended.

Most of the people who maintained coverage for the full year after disenrollment had a prior period of overlapping coverage during which they had both Medicaid or CHIP and private health insurance, the brief noted.

Around four in ten beneficiaries (41 percent) eventually re-enrolled in Medicaid or CHIP within a year. This includes the people who re-enrolled after being uninsured and those who re-enrolled after having other coverage. Nearly 80 percent of beneficiaries who churned were uninsured before re-enrolling in Medicaid or CHIP.

Beneficiaries may experience churn due to short-term changes in income that make them temporarily ineligible for Medicaid. Alternatively, beneficiaries who are still eligible for Medicaid could lose coverage due to administrative obstacles.

Churning can disrupt healthcare access as individuals may have to change providers or navigate new benefits when they switch coverage sources.

The findings emphasize how many beneficiaries do not transition to other coverage after they are disenrolled from Medicaid or CHIP, raising concern about what will happen when the continuous enrollment provision unwinds.

KFF researchers have projected that 5 million to 14 million people will lose Medicaid coverage when the continuous enrollment provision ends.

Data from the Robert Wood Johnson Foundation (RWJF) and Urban Institute predicted a steeper coverage loss consisting of 18 million beneficiaries losing Medicaid and 3.8 million people becoming uninsured.

However, unlike during the pre-pandemic study period, there are policies in place that may help people transition from Medicaid to other coverage. For example, the Inflation Reduction Act extended the enhanced premium subsidies for the Affordable Care Act marketplace for three years.

In addition, more Medicaid beneficiaries have reported being enrolled in private insurance compared to the pre-pandemic period, which will help reduce coverage disruptions after they disenroll from Medicaid.

Still, most individuals will have to transition to other health insurance to avoid coverage gaps, the brief noted.

State Medicaid agencies can help reduce coverage disruptions and churn by streamlining renewal processes, communicating key information to beneficiaries, and improving state eligibility systems.

“Although our analysis provides a pre-pandemic baseline for peoples’ health insurance changes after losing Medicaid/CHIP coverage, state policies for the unwinding will have a major impact on whether people will be more successful in transitioning to other coverage after losing Medicaid compared to pre-pandemic trends,” the brief concluded.