How Ending the Public Health Emergency Impacts Medicaid Enrollees

With the understanding that the public health emergency will eventually come to an end, experts from Kaiser Family Foundation (KFF) are asking what will happen if the US does not have a plan in place to compensate for the end of emergency Medicaid and Affordable Care Act marketplace flexibilities.

The coronavirus public health emergency activated many flexibilities for state and federal payers. Congress required continuous coverage on Medicaid for as long as the public health emergency persists. Legislators also expanded and enhanced Affordable Care Act marketplace subsidies. While these subsidies are not tied to the public health emergency, they only last through the end of 2022.

KFF experts expected that the coronavirus public health emergency would be prolonged. States have not received the 60-day notice that the public health emergency would end in mid-April as planned, which means that the Biden Administration will likely push the expiration date again.

The expiration of emergency or temporary flexibilities could impact millions of Americans. Medicaid has grown by more than 12 million enrollees during the public health emergency so far and the Affordable Care Act marketplace set the record for overall enrollment in plan year 2022 with 14.5 million enrollees.

If the Medicaid flexibilities end without any changes in the current legislation, Medicaid enrollees could start losing their eligibility as soon as the month after the public health emergency ends when states start dis-enrollment processes.

Enrollment losses due to the end of the public health emergency on the Affordable Care Act marketplace would be less immediate. The subsidies would not expire until the end of the year, when enrollees would have to determine if they can afford unsubsidized or less subsidized premium payments.

Once individuals lose Medicaid coverage due to the end of the maintenance of coverage (MOE) requirement, they might fall into one of three categories.

“Some people who lose Medicaid coverage after the MOE ends may be eligible for employer coverage, others may still be eligible for Medicaid but could nonetheless lose coverage if they aren’t able to navigate the redetermination process, and still others will be eligible for Marketplace subsidies,” the experts explained.

Depending on when the enhanced Affordable Care Act marketplace subsidies terminate, the Affordable Care Act marketplace could provide a smooth transition off of Medicaid for individuals who lose Medicaid coverage after the public health emergency, the experts suggested. 

But Affordable Care Act marketplace coverage would still be much more expensive for the newly dis-enrolled Medicaid beneficiaries after the enhanced subsidies expire. Premiums would increase from zero dollars to $65 or, alternatively, the premium could remain the same in a bronze plan but the deductible would soar to $7,000.

Moreover, enabling the Affordable Care Act marketplace to serve long-term as a coverage bridge for dis-enrolled Medicaid beneficiaries would require legislative action to extend the enhanced subsidies. The Build Back Better Act (BBBA) sought to extend enhanced subsidies on the Affordable Care Act marketplace. 

The bill extended enhanced subsidies through 2025, leveraged these subsidies to cover Medicaid coverage gaps, phased out the pairing of continuous enrollment with enhanced federal Medicaid payments, and provided opportunities for eligible Medicaid beneficiaries to hold onto their Medicaid coverage.

“Without the BBBA, coverage losses could be significantly greater,” the experts concluded. 

“The number of people uninsured has not grown during the pandemic and resulting economic crisis. But, perhaps ironically, we could see a big jump in the uninsured rate as the public health emergency ends if people who continue to be eligible for Medicaid are not able to retain coverage and legislation like the Build Back Better Act fails to pass.”

BBBA passed in the House but has not passed in the Senate and evoked mixed reactions from the healthcare industry. Many payers were pleased with the extended tax credits. 

However, some pointed out that the bill’s prescription drug pricing approach could have negative implications for commercial payers and employers. And the American Hospital Association voiced its displeasure at hospital and health system payment cuts.

While the end of Medicaid flexibilities could result in a nearly immediate decline in enrollment due to disenrollments, states will have many processes and competing deadlines to juggle when they emerge from the public health emergency, according to an earlier Kaiser Family Foundation issue brief.