‘The Great Unwinding’: What the pandemic’s end could mean for health coverage

Editor’s Note: This is the first in an ongoing, occasional series examining the potential health coverage impacts that may occur once the federal government declares an end to the COVID-19 public health emergency.

After 2½ years of dealing with COVID-19, the health community is bracing for what some are calling “The Great Unwinding,” possibly affecting millions and potentially the biggest coverage event since the Affordable Care Act was implemented nearly a decade ago.

The Great Unwinding is how the Centers for Medicare and Medicaid Services refers to 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.  When the public health emergency declaration ends – which is expected to happen later this year – millions of Americans are at risk for losing Medicaid or ACA coverage.

According to an analysis by the Kaiser Family Foundation, an estimated 5.3 million to 14.2 million could lose their Medicaid coverage when the COVID-19 public health emergency ends.

Under the public health emergency declaration, more Americans became eligible for Medicaid. In addition, states were required to provide continuous coverage for those who were enrolled in Medicaid on or after March 18, 2020.

"The potential for coverage loss is really significant."
— Kinda Serafi, Manatt Health partner

Further complicating the Medicaid unwinding is the fact that each individual state will develop its own timeframes and approach for unwinding the Medicaid continuous coverage requirements, Kinda Serafi, Manatt Health partner, told InsuranceNewsNet. In addition, the states have up to 12 months to re-enroll the impacted Medicaid recipients.

“The potential for coverage loss is really significant,” she said. “And it's for a number of reasons. It's because many people haven't had their coverage renewed in over two years, they haven't updated their contact information with their state Medicaid agencies, and so they might have moved, they might have changed their phone number. Then when states go to reach out to them to renew, they're not going to be able to find them.

There will be “a huge volume” of renewals at the end of this public health emergency, Serafi said, adding, “And depending on how fast or slow a state takes to sort of move through the backlog of pending renewals – that will really determine whether we're going to see a significant and disproportionate loss of coverage.”

In addition, the Robert Wood Johnson Foundation estimates that more than 3 million people who get their health insurance through the ACA exchange could lose their coverage if enhanced premium tax credits expire at the end of 2022. The American Rescue Plan Act of 2021 increased the premium tax credits for purchasing ACA insurance coverage and extended those credits to more people. This enabled more people to purchase health insurance, swelling the ranks of those covered under the exchanges to a record of 14.2 million. However, the enhanced tax credits are set to expire after 2022.

“I think the bottom line is that a lot of people are going to lose coverage,” Tara Straw, Manatt Health senior advisor, told InsuranceNewsNet.

Whether the enhanced tax credits will continue after the end of this year “is very much up to Congress,” Straw continued. “I don't have a prediction as far as the likelihood of that happening, but certainly it comes down to dollars and cents. Do they have the funding to maybe extend these subsidies or to make them permanent? Do they have the offsets? Who knows?”

When will the health emergency end?

The date for ending the public health emergency has been pushed back more than once and it’s likely to be pushed back again.

The Department of Health and Human Services implemented the public health emergency in January 2020. On April 16, HHS extended the emergency until mid-July, and is expected to extend it for an additional 90 days after that, which takes it to October.

The Biden Administration has said that it will give states a 60-day notice before the public health emergency expires. No such notice has been given for a mid-July expiration, leading most to believe that the public health emergency will go on at least until October.

Predicting the end of the public health emergency “is a little bit of tea-leaf reading,” said Serafi of Manatt Health. “So, I don’t participate in trying to predict it because, really, who knows?”

In a news conference in March, HHS Secretary Xavier Becerra said that the decision to end the emergency will depend on a number of factors, including where the science is heading on the pandemic, whether the number of COVID-19 cases continues to trend downward and whether a sufficient percentage of the population is vaccinated.

“If COVID still poses a threat and if we retract those authorities that let us do telehealth in ways that we have not been able to do before, do we let COVID surge again?” he told reporters.

Emergency enabled flexibility

The public health emergency declaration gave the federal government the flexibility to waive or modify certain requirements in a number of areas, including Medicare, Medicaid, CHIP and private health insurance. In addition, Congress enacted legislation – The Families First Coronavirus Response Act and The Coronavirus Aid, Relief, and Economic Security Act – that provided additional flexibilities tied to the public health emergency. Those flexibilities end when the public health emergency ends.

The flexibilities allowed under the declaration and legislation include:

• Eliminating cost-sharing for receiving COVID-19 vaccines, testing, testing-related services and certain treatments.
• Expanding eligibility for Medicaid. States are required to provide continuous eligibility for individuals enrolled in Medicaid on or after March 18, 2020. States are not permitted to transfer a Medicaid enrollee to another coverage group that provides a more restrictive benefit package.
• Expanding access to telehealth for Medicare, Medicaid and CHIP beneficiaries.
• Extending deadlines and notices for COBRA and other group health plan provisions. These include the date for making COBRA premium payments, the deadline for employers to provide individuals with notice of their COBRA continuation rights, and the 30-day special election period to request enrollment in a group health plan.

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]. Follow her on Twitter @INNsusan.

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Susan Rupe is editor in chief, magazine, 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].