Medicaid, PHE, ACA, and Redetermination
Medicaid, PHE, ACA, and Redetermination
April 1, 2023 marked a change for millions of Medicaid recipients who will be disenrolled over next 12 months. And, it has effects beyond the individual. Here's a primer on Medicaid & Redetermination
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This is a big deal. As reported by Axios,
about 15 million persons are likely to be disenrolled from Medicaid. That is about 18% of all Medicaid recipients.
Let’s do a 2 mins recap of Medicaid and the ACA first.
What is Medicaid?
Medicaid is a federal and state partnership that offers the benefits of health insurance for certain individuals. Most commonly, the eligible persons are low-income adults, children, pregnant women, elderly adults, and people with disabilities. Medicaid is administered by states, according to federal requirements. The program is funded jointly by states and the federal government.
How many people are covered by Medicaid?
As of December 2022 — 85.2 million people in the US were enrolled in Medicaid, and another 7 million+ in CHIP.
What services are covered under Medicaid?
Acute care (hospital)
Physician visits
Laboratory
Radiology
Home Health
Nursing Facility
EPSDT benefit, for kids< 21 yrs
Prescription Drugs
Dental
Vision
Personal care for frail seniors & people w disabilities
What is ACA’s influence on Medicaid?
Before the Affordable Care Act (ACA), Medicaid coverage was restrictive and difficult to obtain for those adults without disabilities, under the age of 65 years, or those who did not have minor children. The ACA incentivized states to expand Medicaid coverage to nonelderly adults with income up to 138% FPL ($14,580 annually for an individual in 2023). The initial incentive was 100% federal matching funds to the state. As of 2023, this is now at 90% federal matching funds. Due to the 2012 Supreme Court Ruling, rather than mandating Medicaid expansion, states were given the option to expand. By 2019, a total of 34 states (including DC) had expanded Medicaid coverage.
How did the Public Health Emergency (PHE)/ COVID influence Medicaid expansion?
During the PHE, Medicaid enrollment was maintained on a continuous basis for those who were eligible. Thus decreasing the Coverage Gap.
Furthermore, the American Rescue Plan Act of 2021 further incentivized non-expansion states to move forward with the help of temporary incentives for states to newly implement the ACA Medicaid expansion - above the usual federal dollars they would receive for Medicaid program.
What happens now - disenrollment and redetermination?
The Consolidated Appropriations Act of 2023 “decouples the Medicaid continuous enrollment provision from the PHE and terminates this provision on March 31, 2023” per KFF. This allows states to no longer maintain continuous enrollment of adults into Medicaid. Instead, they disenroll persons and seek a “redetermination,” meaning people have to be reprocessed after they show proof of eligibility for Medicaid. On the average day, this may not be a big deal. But it is a big deal.
Why is this a big deal?
No one can clearly predict how many persons in the US are likely to be disenrolled because each state has a different system. The estimate is anywhere from 6.8 to 15 million persons in this year alone.
The largest shortfall in Medicaid coverage due to disenrollment is expected in those who became eligible as a result of the recent Medicaid expansion.
Disenrollment causes temporary loss of insurance coverage for patients — many may not be aware of disenrollment, not understand the process of requalification, or face other barriers such as limited state resources in assistance for re-enrollment.
A 2018 study (shown below) found that 10% of Medicaid recipients were disenrolled and re-enrolled within 1 year. This 10% faced a coverage gap. This coverage gap was removed due to the PHE and the American Rescue Plan of 2021.
Final Thoughts
While we may think that Medicaid disenrollment has a limited effect beyond the Medicaid enrollee, studies show that Medicaid enrollment and continuous access to Medicaid show overall economic growth in states that have expanded. Further, studies show that Medicaid access “improved access to care, utilization of services, the affordability of care, and financial security among the low-income population.” This last part is key. Financial security among the lower-income population is known to improve the overall financial security of the entire community, given less reliance on public services.
Furthermore, the loss of health insurance is a significant cost to the population at large and the US healthcare system. The increased prevalence of uninsured in a community increases the risk of foregoing preventive care or early detection of disease - increasing the likelihood of ED visits and hospitalizations. This in turn increases the likelihood of loss in wages, unpaid bills, and unemployment for the individual. Meanwhile for the community - increased unpaid medical bills, lead to medical bankruptcy, decreased investment in the neighborhoods, and increased burden of the cost of care on the local hospitals and states. Per KFF, “high uninsured rates also contribute to rural hospital closures, leaving individuals living in rural areas at an even greater disadvantage to accessing care.”
And with an already strained healthcare workforce, hospitals, and system, lower-cost care with higher impact is the key to a better future for individuals and our communities.
“Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”
- Dr. Martin Luther King Jr.