The COVID-19 pandemic has stripped millions of people of their jobs and health insurance. So far, those newly uninsured have yet to enroll in Medicaid.
Enrollment in the public insurance program has begun to climb in most states in recent months, as expected. But the growth has been driven by states pausing Medicaid eligibility redetermination processes during the public health crisis. Health insurers and states health departments say they have not seen significant enrollment growth among people who have lost job-based health coverage.
A handful of the largest Medicaid managed care insurers have reported Medicaid membership growth of 5% to 7% over the last few months, each attributing the bulk of the gains to the freeze on eligibility redeterminations, as required under the Families First Coronavirus Response Act.
Some states, including Arizona, Louisiana and Oklahoma, that have seen relatively large increases in Medicaid enrollment amid the coronavirus crisis also attributed the growth to the fact that they can’t disenroll any members during the public health emergency.
“Pretty much all states I’ve talked to are seeing enrollment growth because of that (maintenance of effort) requirement,” said Lindsey Browning, program director of Medicaid operations at the National Association of Medicaid Directors, referring to the provision in the act that barred states from cutting Medicaid coverage while receiving additional federal funds during crisis. “The biggest question is when and how big is Medicaid enrollment growth going to be as a result of job losses and the economic downturn? We’re not seeing a lot of that enrollment growth yet.”
Experts said it’s possible that the newly jobless and uninsured are tending to more immediate needs, such as food and rent, before securing health coverage. Rather than resorting to layoffs during the pandemic, many employers furloughed their workers and allowed them to keep health benefits, which could also explain the lag. Others worry the newly jobless remain uninsured because they don’t know Medicaid is an option.
In past recessions, Medicaid enrollment swelled as people with employer-sponsored coverage lost their jobs and benefits and looked to the safety net program as a temporary replacement. The recent economic slump is expected to be no different. The Urban Institute projected that almost 12 million people could enroll in Medicaid if the unemployment rate reaches 20%. At an unemployment rate of 15%, 8.2 million could gain Medicaid coverage.
While the national unemployment rate peaked at 14.7% in April, it has since fallen to 11.1% in June, according to the Census Bureau. Medicaid membership has increased, but at a rate slower than some expected. Nationwide, enrollment in Medicaid and the Children’s Health Insurance Program totaled 72.3 million in April, an increase of 1.7% or 1.2 million people since December 2019, according to the latest federal data.
Enrollment changes varied widely across the country, though enrollment increased in most states. Excluding Idaho, which experienced a very large increase in enrollment after expanding Medicaid effective this year, Oklahoma, Louisiana, Utah and saw some of the greatest enrollment growth.
In Oklahoma, roughly 866,000 people were enrolled in the state’s Medicaid program in June, an increase of nearly 11% since January, according to the Oklahoma Health Care Authority, which attributed the growth to the pause on eligibility checks.
“The reason we attribute the growth in enrollment to the suspension of redeterminations is because we have not seen any significant increase in new applications and enrollment above what was seen pre-COVID,” a spokeswoman said.
On the flipside, seven states and D.C. saw Medicaid membership drops between December and April, according to CMS data. Membership in Medi-Cal, California’s Medicaid program, shrunk 0.2% between January and July to 12.5 million, based on more recent state data.
Some of the biggest health insurers saw less of a shift than they expected. Between the first and second quarters of 2020, Centene Corp., the largest Medicaid managed care insurer, said its Medicaid insurance rolls grew 6%, or roughly 736,000 members, to 12.6 million. Centene which had expected greater growth, said the increase stemmed from the suspension of eligibility redeterminations. It tempered its enrollment expectations for the rest of the year and lowered its revenue guidance as a result.
UnitedHealthcare added 330,000 Medicaid members in the quarter, an increase of 5.6% since March 31; Anthem added 565,000, up 7.4%; and Molina enrolled 152,000 new members, an increase of 5.1%. Like Centene, each insurer attributed the growth to the pause in eligibility checks.
In normal times, states check once or twice a year to see whether Medicaid beneficiaries are still eligible for the program. The process requires beneficiaries to complete burdensome paperwork and if not completed quickly, they may be kicked off Medicaid. The redetermination processes are paused for now, so Medicaid members are not falling off the program each month.
Meanwhile, insurers aren’t losing as many people enrolled in job-based coverage as anticipated. Cigna’s commercial enrollment slipped 1% in the three months ended June 30, which CEO David Cordani said reflected “strong customer retention.” Anthem lost 290,000 commercial members, a decrease of less than 1%, and UnitedHealthcare’s lost 270,000 commercial members, a 1% decrease.
“What we’re seeing so far is our customer base has used a lot of furloughs vs. layoffs to reduce costs in the short term…This allows them to maintain medical benefits throughout,” UnitedHealthcare CEO Dirk McMahon said during the company’s second quarter earnings call in July.
Insurers also said that federal stimulus actions and enhanced unemployment benefits could be contributing to lower-than-expected Medicaid enrollment. As temporary unemployment becomes permanent, or as certain benefits, such as COBRA, expire, they still expect Medicaid enrollment to grow and employer-sponsored insurance membership to shrink over the rest of the year.
In California, LA Care Health Plan, the largest publicly operated Medicaid plans with more than 2 million members, had projected its membership would balloon by 250,000 to 400,000 members. So far, it has only seen growth of about 20,000 to 25,000, all due to the pause on eligibility checks. But the demand on its website for community assistance related to food has skyrocketed.
“People may be unemployed and more concerned about food than they are about healthcare,” LA Care CEO John Baackes said.
Social distancing might have resulted in fewer people learning about their coverage options, Browning said. Many people are introduced to and get help applying for Medicaid coverage at federally qualified health centers, she said. But doctor’s offices closed and people put off routine care and other procedures to avoid COVID-19.
Browning said states vary in how much outreach they’re doing to let people know about their coverage options. Some states have sent health insurance information to those who have filed for unemployment.
“Many people don’t know their coverage options, especially those who have never gone through this before,” said Joe Weissfield, director of Medicaid initiatives at consumer healthcare advocacy organization Families USA. “Navigating the process is time consuming and confusing. This is where enrollment assisters are so important … Unfortunately, funding for these assisters has been on the decline and the work is increasingly difficult due to COVID-19.”
Weissfield said that despite the lag in enrollment among newly uninsured, he suspects that a “tsunami” of enrollment is around the corner.
States will face myriad challenges dealing with a potential flood of new Medicaid enrollees. Depending on how automated a state’s system is, backlogs could arise when processing applications. But the biggest challenge states will face is managing the added cost of covering new beneficiaries at a time when states’ budgets are already constrained by the pandemic.
States may resort to changing eligibility rules, cutting provider payments, or slashing benefits to cut costs, depending on what’s allowed by federal policy at the time, said Cindy Mann, a partner at Manatt Health.
State governments and dozens of healthcare organizations have urged Congress to shore up state Medicaid programs by providing additional federal matching funds, above the increase they received ealier this year. Recently proposed coronavirus relief legislation by Senate Republicans did not heed their requests.
“While state have noted that enrollment increases have been slower than anticipated, I don’t see any states not projecting that those enrollment increases will happen,” Mann said. “Timing is one thing, but enrollment increases are definitely on their way.”