How Medicaid Expansion Impacted Coronavirus Uninsurance Rates

The low- and middle-income communities’ shifts in uninsurance rates differed largely based on the state’s Medicaid expansion status, a Robert Wood Johnson Foundation and Urban Institute report discovered.

The researchers used Urban Institute’s Health Reform Monitoring Survey (HRMS)—which has been around for eight years—in order to assess insurance changes in the March and April months of 2019, 2020, and 2021.

The data indicated that employer-sponsored health insurance decreased while public healthcare coverage increased from 2019 to 2021.

Approximately 5.5 million nonelderly adults lost their employer-sponsored health plan coverage, leading to a drop in employer-sponsored healthcare coverage from 65.0 percent to 62.3 percent.

Meanwhile, public insurers gained around 7.9 million nonelderly adult beneficiaries, increasing the share of the population with public insurance from 13.6 percent to 17.5 percent.

The pandemic seems to have had the same effect on public payer coverage in Medicaid expansion states and nonexpansion states alike. Within this population, public payer coverage in Medicaid expansion states jumped from 14.9 percent to 19.2 percent, while in nonexpansion states it rose from 10.7 percent to 14.3 percent.

However, when it came to uninsurance rates, Medicaid expansion seems to have made a difference. In Medicaid expansion states, the uninsurance rate remained stable over the study period at eight percent. But in nonexpansion states, uninsurance rose considerably across the three years, starting at 17.2 percent in 2019 and rising to 18.2 percent in 2021.

Despite these big differences, the national uninsurance rate remained the same at around 11 percent.

Low-income workers in nonexpansion states were more likely to be uninsured than those in expansion states. By the end of the study period, more than one in three low-income individuals in nonexpansion states were uninsured, compared to one in seven in expansion states.

However, the policies that spread a coverage safety net in Medicaid and in the Affordable Care Act marketplace during the first surges of the coronavirus pandemic are ending. This could be problematic for low-income and middle-income individuals who may still be feeling the financial and employment impacts of the pandemic.

The researchers warned that the end of Medicaid’s maintenance of eligibility mandate would put coverage at risk for individuals who applied or renewed their application for Medicaid coverage.

“Though the public health emergency and Medicaid disenrollment freeze will likely be extended at least until early 2022, states will need to process a backlog of coverage renewals and redeterminations when the freeze is lifted,” the researchers noted. 

“Resuming normal operations too quickly could lead to a surge in erroneously rejected applications and renewals, putting coverage at risk for people who are eligible for Medicaid.”

Additionally, the American Rescue Plan’s subsidies for the Affordable Care Act marketplace will only be in place for one more year, through 2022.

The Families First Coronavirus Response Act expanded the federal medical assistance percentage points for states that chose to adopt maintenance of eligibility requirements.

In June 2021, CMS has pointed to the surge in public payer coverage as evidence that the policy had the intended effect of providing a safety net for individuals experiencing the economic impacts of the pandemic. 

At the time, HHS had reported that Medicaid enrollment grew by more than 6 million adults between February 2020 and January 2021. Enrollment in the Children’s Health Insurance Program (CHIP) had also received a boost of 3 million new beneficiaries.

Experts have sounded the alarm regarding the challenges that Medicaid programs can expect to face as the coronavirus response waivers and policies expire, namely challenges with Medicaid applications, verifications, redeterminations, and renewals.

The Urban Institute and Robert Wood Johnson Foundation’s data emphasized the impact that coronavirus policies have had on uninsurance and coverage rates.