Majority of Medicaid recipients will transition to employer coverage, study shows

Medicaid recipients who obtained coverage during the COVID-19 public health emergency must prove they are still eligible for the program now that the public health emergency is over.

An estimated 18 million Medicaid recipients must re-apply or risk losing coverage. But a recent study funded by an insurance industry trade group showed that the majority of those Medicaid recipients will transition to employer-provided coverage.

An AHIP-funded project, carried out by NORC, provided statewide estimates for the number of Americans predicted to lose their Medicaid coverage during redetermination.

The research found that, in nearly all states, the majority of those impacted by the Medicaid redetermination will obtain coverage through an employer.

Variation across the states ranges from the lowest proportion (48.9%) in Georgia, to the highest proportion (57.1%) in Delaware, enrolling in employer-provided coverage.

3.8M current Medicare recipients to be uninsured

However, not everyone will remain in coverage, the research found. About 3.8 million (or 21.2%) of people who lose Medicaid coverage during redetermination are estimated to become uninsured. Variation ranges from 17.7% in Massachusetts to 26.2% in South Dakota.

About 15% of children who are subject to Medicaid redetermination will transition to CHIP coverage, the research estimated. Seven percent are estimated to transition to individual coverage, such as Affordable Care Act coverage, while another 3% could be eligible for other public health insurance coverage.

States that received extra Medicaid funding under a 2020 COVID-19 relief bill had to agree to pause beneficiaries’ eligibility verifications. The continuous enrollment in Medicare was set to end when the public health emergency ended on May 11.  Known as The Great Unwinding, the undoing of many health coverage requirements and incentives put into place as a result of the COVID-19 public health emergency declaration and related legislation will be undone when the public health emergency is over.

Under the $1.65 trillion federal spending bill approved by Congress in December, states could begin disenrolling people from Medicaid in April even if the public health emergency designation remains in place. Many of those who will lose coverage are likely to qualify for coverage under the Affordable Care Act, according to public-health officials and advocates.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].