As the COVID-19 public health emergency continues to destabilize the economy, more individuals are turning to their state Medicaid agencies for health coverage. To date, more than 40 million Americans have filed for unemployment benefits in the past 10 weeks, and with job losses many individuals will inevitably lose employer-based health coverage.
Current projections show Medicaid enrollment climbing in the coming months. A recent study conducted by the Kaiser Family Foundation (KFF) estimates that close to 27 million people could lose their employer-sponsored insurance (ESI) due to the economic fallout from COVID-19, and about 12.7 million will be eligible for Medicaid coverage. In a similar study, the Urban Institute projects that 47 percent of individuals who lose ESI would enroll in Medicaid, increasing national enrollment in the program by approximately 11.8 million. Together, these findings show that Medicaid will become the primary source of coverage for individuals who have lost ESI coverage.
While enrollment data from the initial period of the COVID-19 health crisis is not expected to be released by federal officials for several months, local news organizations are reporting preliminary state data that shows some states have already started to experience significant increases in Medicaid enrollment.
- Hawaii’s Medicaid program has received over 21,000 applications since early March, representing an increase of 40 percent from this time last year.
- In April alone, Ohio added 140,000 individuals to its Medicaid program, which brings the percentage of the state’s population covered by Medicaid to 25 percent.
- Michigan and Delaware also experienced significant enrollment spikes, despite declining enrollment during the same period last year, and other states reporting recent enrollment increases include Connecticut, Georgia, New Jersey, New Mexico, Oregon, Pennsylvania, and Virginia.
Some of these enrollment changes could be the result of requirements states must comply with to receive the 6.2 percentage-point increase in the federal medical assistance percentage (FMAP) provided by the Families First Coronavirus Response Act. To receive the increase, states cannot terminate Medicaid coverage during the emergency period for individuals enrolled on or after March 18. However, this likely only accounts for a small portion of the increased enrollment.
While it will take months to understand the full scope of Medicaid enrollment trends during this health and economic crisis, a recent KFF survey found that the vast majority of states with enrollment projections anticipate that enrollee growth this year will far exceed pre-COVID projections for state fiscal year (SFY) 2020 and will continue to rise through SFY 2021.
There could also be an uptick in enrollment in the Children’s Health Insurance Program (CHIP) as families lose ESI and seek coverage options for their children. However, the number of families whose incomes make them eligible for CHIP is not yet known, and some may instead become eligible for Medicaid. Some states have indicated that CHIP enrollment is staying stable or slightly rising because states are opting not to process terminations during the emergency period, while other states have reported significant spikes in CHIP enrollment. Notably, Pennsylvania enrolled 10,200 new children in March and April of this year, increasing its total CHIP population by 5 percent.
Despite these initial reports of increased enrollment over the course of the emergency period, many state officials expect it will take several months before public health coverage programs feel the full effects of the economic crisis. State health officials credit this to several factors, including:
- Grace periods and premium flexibilities that have allowed some employers to maintain coverage for their furloughed and terminated workers;
- Consumer priorities, which are focused on securing immediate needs, such as unemployment benefits and food and housing assistance; and
- Knowledge gaps about where to seek coverage.
To help increase and maintain access to Medicaid and CHIP coverage during the COVID-19 pandemic, many states have elected to pursue flexibilities though disaster relief state plan amendments (SPAs) to ease eligibility determination and cost-sharing requirements and expand opportunities for enrollment. Many states have chosen to waive premiums or copayments, expand presumptive eligibility, and allow for self-attestation of certain eligibility criteria. According to a KFF analysis, 43 states have implemented actions to facilitate access to coverage in Medicaid and CHIP amid the crisis, and the National Academy of State Health Policy (NASHP) is also tracking flexibilities that states have adopted through Medicaid and CHIP SPAs.
State-based health insurance marketplaces have also served as a point of entry for Medicaid coverage for many individuals who have lost employer-based health coverage. Of the 13 state-based marketplaces, 12 have elected to open special enrollment periods (SEPs) for uninsured individuals in the wake of COVID-19. These SEPs have drawn attention to the coverage options that exist outside of employee health plans through advertising campaigns and direct outreach coordinated with states’ labor and unemployment departments. Among the states that that have released enrollment data from their COVID-19 SEPs, Minnesota and Maryland have reported that over 50 percent of individuals who gained coverage through the SEPs were found to be eligible for Medicaid.
As states continue to invest in efforts to enroll a greater number of eligible individuals in Medicaid, they will need to contend with looming budget constraints. In the coming months, states will be challenged with shrinking state revenues and growing costs associated with increased Medicaid enrollment and testing and treatment for COVID-19. It is likely that as emergency protections, such as grace periods for premium payments, for consumers in the commercial market end, more individuals will lose their insurance and may be eligible for publicly subsidized health coverage.
Also, because the increased FMAP is only available through the public health emergency period, an additional concern for states is that it may not be adequate for addressing the long-term economic effects of the outbreak. Governors have already expressed the need for an additional increase to the FMAP and for an extension of this increase through September 2021, but unless Congressional action occurs, states will be facing difficult choices. For many states, budget shortfalls will require significant cuts to Medicaid, leading to new challenges as an unprecedented number of individuals rely on public programs for coverage. NASHP will be continuing to support state officials as they navigate through these complex budgetary, policy, and operational issues.