COVID Pushes Medicaid to Record Enrollment
The COVID-19 pandemic has had a profound impact on nearly every aspect of American life, and the nation’s health care safety net is no exception. Medicaid enrollment has surged to record levels, with significant implications for families, states, and the future of health care policy.
Record-Breaking Enrollment Numbers
As of early 2021, approximately 80.5 million Americans were enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). This represents an increase of 9.7 million people since February 2020, when the pandemic began its spread across the United States. That is a 15.2 percent increase in just over a year, pushing Medicaid enrollment to the highest level in the program’s history.
These numbers are staggering, but they are not surprising. The pandemic caused unprecedented job losses, and with those lost jobs went employer-sponsored health insurance. Millions of Americans who had never before qualified for Medicaid suddenly found themselves eligible as their income dropped.
State-by-State Variation
The growth in Medicaid enrollment varied significantly from state to state. Alaska saw the smallest percentage increase at approximately 7 percent, while Utah experienced the largest increase at approximately 25 percent. These differences reflect the varying economic impacts of the pandemic across different regions of the country, as well as differences in state Medicaid eligibility rules and expansion status.
States that had previously expanded Medicaid under the Affordable Care Act generally saw larger increases in enrollment, as more people fell into the expanded eligibility categories during the economic downturn. States that had not expanded Medicaid still saw significant growth, but many low-income residents in those states fell into a coverage gap where they earned too much for traditional Medicaid but too little for marketplace subsidies.
Federal Policy Response
The federal government’s response to the surge in Medicaid enrollment has been shaped by the changing political landscape. The Biden administration has taken a different approach than the Trump administration, focusing on expanding access to coverage and making it easier for people to enroll in and maintain Medicaid coverage.
One of the most significant policy changes during the pandemic was the 6.2 percent increase in the federal matching rate for Medicaid, known as the Federal Medical Assistance Percentage (FMAP). This increase was provided through the Families First Coronavirus Response Act and was designed to help states absorb the cost of surging enrollment. In exchange for the enhanced federal funding, states were required to maintain continuous enrollment for Medicaid beneficiaries, meaning they could not disenroll people during the public health emergency.
This continuous enrollment requirement has been a major driver of the sustained growth in Medicaid rolls. Under normal circumstances, Medicaid beneficiaries must periodically re-verify their eligibility, and many people lose coverage during this process, sometimes because they no longer qualify but often simply because of paperwork issues. The continuous enrollment requirement prevented these losses, keeping people covered throughout the pandemic.
Looking Ahead
As the public health emergency eventually winds down, states will need to begin the process of redetermining eligibility for the millions of people who were enrolled during the pandemic. Experts estimate that approximately 4 million people could potentially become newly eligible for Medicaid as a result of changes in their financial circumstances, while many current enrollees may no longer qualify as the economy recovers and incomes rise.
The unwinding of the continuous enrollment requirement will be one of the most significant administrative challenges in Medicaid history. States will need to process redeterminations for tens of millions of people, and there is significant concern that many eligible individuals will lose coverage due to administrative barriers rather than actual changes in eligibility.
What This Means for Families
For families engaged in Medicaid planning, these changes underscore the importance of understanding the current rules and staying informed about policy developments. Medicaid eligibility is complex and varies by state, and the landscape is shifting rapidly.
If you or a loved one is currently enrolled in Medicaid, it is important to keep your contact information up to date with your state Medicaid agency, respond promptly to any correspondence regarding eligibility redetermination, and consult with an attorney who understands Medicaid planning if you have concerns about maintaining coverage.
For those who are not currently enrolled but may need Medicaid in the future, particularly for long-term care needs, the current environment highlights the importance of planning ahead. Medicaid has strict financial eligibility requirements, and advance planning can help protect your assets while ensuring you qualify for the care you need.
If you have questions about Medicaid planning or need assistance navigating the current Medicaid landscape, contact our office today.
