The Census Bureau released its annual data from the Current Population Survey (CPS) and the American Community Survey(ACS) on health insurance coverage in the US this week. Although the numbers differ slightly, both surveys show that after increasing for several years prior to the pandemic, the uninsured rate declined in 2021, driven by an increase in public coverage, particularly Medicaid coverage. According to data from the American Community Survey (ACS), the uninsured rate dropped from 9.2% in 2019 to 8.6% in 2021 – representing over 1.5 million people gaining coverage — matching the historic low uninsured rate reported in 2016 following implementation of the Affordable Care Act (ACA) (Figure 1).
Policies adopted during the pandemic to ensure continued coverage in Medicaid were largely responsible for the decline in the uninsured rate. Specifically, provisions in the Families First Coronavirus Response Act (FFCRA), enacted at the start of the pandemic, prohibit states from disenrolling people from Medicaid until the month after the COVID-19 public health emergency (PHE) ends. The ACS data show an increase of 1.3 percentage points in the Medicaid coverage with 69 million covered by Medicaid in 2021. Data from the Centers for Medicare and Medicaid Services (CMS) showed that Medicaid enrollment in May 2022 had increased by nearly 25% since February 2020, much larger than the ACS increase, with 87 million enrolled as of December 2021. There are long-standing discrepancies between survey and administrative data, due in part to different ways of counting people. Medicaid administrative data are reported by states and reflect enrollment at the end of a given month while the ACS asks individuals about coverage at a point in time. However, many people may not know they have Medicaid coverage, perhaps because their coverage is administered by a private managed care plan, and may misreport their source of coverage on the survey. National survey data also typically undercount lower income people who are more likely to be covered by Medicaid. Because so many people have been kept continuously enrolled in Medicaid during the public health emergency – in many cases without any notification – the disparity between administrative and survey data may be exacerbated.
Enhanced ACA Marketplace subsidies made available by the American Rescue Plan Act (ARPA) and renewed for another three years in the Inflation Reduction Act of 2022 (IRA), also contributed to the coverage gains in 2021. The Biden Administration also increased funding for consumer assistance and established a special ACA enrollment period during the pandemic in 2021. While private coverage dropped overall, direct purchase coverage, which includes Marketplace coverage, increased by 0.6 percentage points to 13.7% in 2021.
Despite these coverage gains, about 28 million people remain without health insurance and concerning disparities in uninsured rates persist. People of color, with the exception of Asian people, have higher uninsured rates than White people. The uninsured rate for people who live in poverty is nearly five times that of people with incomes over 400% of the federal poverty level. And, people who live in states that have not expanded Medicaid are nearly twice as likely to be uninsured as those who live in expansion states (Figure 2).
The number of people who are uninsured would be reduced further by closing the coverage gap in the dozen states that have not adopted the Medicaid expansion. Previous KFF estimates show there are 2.2 million uninsured people with incomes below poverty ineligible for Medicaid or ACA subsidies in these states. A temporary federal policy to close the coverage gap was included in the House-passed reconciliation bill; however, that provision was not included in the IRA. Without a federal program, attention will turn back to the states, where expansion is likely to be an issue in some upcoming state elections.
While this week’s news points to increased coverage, these coverage gains could be short-lived. Once the public health emergency ends, which is expected sometime next year, states will resume Medicaid redeterminations and will disenroll people who are no longer eligible or who are unable to complete the renewal process even if they remain eligible. As a result, KFF estimates that between 5 and 14 million people could lose Medicaid coverage, including many who newly gained coverage in the past year.
Preventing an erosion of the new gains in coverage will be challenging once the Medicaid continuous enrollment requirement ends, and results will likely vary from state to state depending on how they approach unwinding the requirement. For example, states that streamline the Medicaid renewal process and help people transition to other coverage are likely to see fewer coverage losses. The continued availability of the enhanced Marketplace subsidies will make that coverage more affordable for people who are disenrolled from Medicaid and may increase the share of people who successfully transition from Medicaid to Marketplace coverage.