The Stability and Continuity of Medicaid Coverage

A lthough Medicaid is the nation's largest health insurance program, its coverage has historically been less stable than Medicare and employer-sponsored insurance, the other primary types of insurance. Medicare is essentially permanent after people become eligible at age 65 years, and employer coverage is generally stable as long as workers remain in the same job. But Medicaid beneficiaries could lose coverage for many reasons, such as if their incomes fluctuated above strict state income limits or if they lost status as children or pregnant women. In addition, onerous paperwork burdens also led to the loss of Medicaid even if people were actually still eligible (1). Many who lost Medicaid eventually reenrolled later. Until 2020, millions of people lost coverage or “churned” off and onMedicaid every year. Research in the article by Ndumele and colleagues examined the long-term stability of health insurance coverage for Medicaid beneficiaries in Michigan during the prepandemic period, from 2011 to 2020 (2). They found that about half of those enrolled on January 2011 were still enrolled 9 years later, although they were only covered about 67% of the time. Using an alternative method that does a better job of counting all Medicaid enrollees, coverage was less stable. Those with permanent disabilities had the most stable coverage, followed by children, whereas nondisabled nonelderly adults had the most volatile coverage (the researchers excluded elderly beneficiaries, who were also covered by Medicare). Continuity matters because even brief gaps in Medicaid coverage can disrupt the continuity of patient–physician relations, reduce medical care use, cause patients to stop medications, and worsen medical problems that are avoidable with proper care (3, 4). The disruptions are also wasteful and are associated with higher monthly Medicaid costs per enrollee (5, 6). This situation changed in early 2020, when federal COVID-19 relief legislation created a temporary nationwide moratorium on disenrolling Medicaid beneficiaries, linked to a temporary increase in the federal Medicaid matching rate. This moratorium led to substantial growth in Medicaid enrollment, which increased by roughly 20%. This growth helped lower the number of uninsured Americans in 2021, despite the economic turmoil of the COVID-19 pandemic (7). But the moratorium will expire when the U.S. Department of Health and Human Services (HHS) declares that the COVID-19 public health emergency is over. The expiration date is currently January 2023, although further extension seems likely. After expiration, a great “unwinding” will occur as states begin to redetermine which of the more than 80 million beneficiaries remain eligible. As many as 15 million people could lose their Medicaid coverage, althoughmany will be eligible for other insurance (8). Although HHS is advising states to proceed with caution to avoid unnecessary disruptions, it is nonetheless likely that the unwinding will lead to the greatest 1-year loss of health insurance coverage in American history. Under the design originally enacted in the Patient Protection and Affordable Care Act, all states were supposed to cover Medicaid eligibility up to 138% of the poverty line and those whose incomes increased above that level could transition into the subsidized health insurance marketplaces. But, after a 2012 Supreme Court decision altered that policy, states had the option to not expandMedicaid. Eleven states did not expandMedicaid and still have a gap between where their Medicaid eligibility ends and marketplace eligibility begins (in November, South Dakota passed a ballot initiative to expand Medicaid eligibility, exercising an option under the American Rescue Plan). After the unwinding, most states will probably revert to pre-2020 enrollment policies like those assessed by Ndumele et al. Medicaid will destabilize again. But states still have options to stabilize Medicaid coverage. States that have not done so can choose to expand Medicaid, which both increases the number insured and the continuity of coverage (9). Amore incremental choice is to adopt 12-month continuous eligibility for children, as almost half of the states have done, or for adults, as New York has done. Both alternatives have been demonstrated to stabilize coverage in a cost-effective manner (6, 10). Oregon has adopted a policy to continue Medicaid coverage for children through age 6 years. There are many other ways that states could streamline their Medicaid renewal procedures. But, ultimately, we may need to more fundamentally reconsider elements of Medicaid eligibility, so that low-income Americans have stable coverage comparable to that available to the elderly on Medicare or to middle-income working families with employer-sponsored insurance.