The Office of the HHS Assistant Secretary for Planning and Evaluation (ASPE) released new projections of the number of people likely to lose Medicaid after the COVID-related continuous coverage protection is lifted at the end of the public health emergency (PHE). Similar to other analyses, ASPE estimates that about 15 million people, including 5.3 million children, will be disenrolled from Medicaid after the PHE ends. What’s different about this report is that it breaks down the predicted loss of coverage by ineligibility versus procedural reasons (referred to as “administrative churn” by ASPE). Overall, 45 percent of those projected to be disenrolled during the unwinding will still be eligible, confirming our worst fears that procedural disenrollments will lead to coverage losses. That means about 6.8 million enrollees, including 3.8 million children, are projected to lose Medicaid during the PHE unwinding despite being eligible.
The risk of coverage loss due to administrative churn is greatest for children: nearly 3 out of every 4 children losing Medicaid will remain eligible! Of all the age groups studied, children ages 0-17 may experience the highest share of disenrollment due to administrative churn: a whopping 72.2 percent! Young adults, ages 18-24, are the next highest risk age group with 40 percent expected to remain eligible but be disenrolled.
People of color also face a higher risk of procedural disenrollment. Only 17 percent of White non-Latino enrollees are projected to lose coverage due to administrative churn compared to 64 percent of Latinos and 40 percent of Black non-Latinos.
Disenrollment for procedural reasons or administrative churn occurs when the state is missing information, including forms or documents, to verify eligibility. We often hear that procedural disenrollments occur when enrollees “fail” to renew. But it’s often a “system failure.” Common themes from disenrollees include “I never got the notice”, “I couldn’t get through to the call center” or “I sent in the paperwork but it got lost.” There are a number of permanent and temporary actions states can take to streamline state systems and processes, improve the renewal response rate, and reduce procedural disenrollments but we’ll leave that for a future blog.
A majority children will likely remain eligible for Medicaid or CHIP, while about one-third of all ineligible disenrollees will be eligible for expanded premium tax credits. The ASPE report did not provide a specific estimate on the number of children who are likely to remain eligible for Medicaid or CHIP, but “a majority” is consistent with an analysis published by the Urban Institute estimating that 57 percent of children losing Medicaid would still be eligible for CHIP. Similar to our February report highlighting state level factors that could result in greater risk of disruptions in coverage for children, the ASPE report noted that children who live in states with separate CHIP programs and those that charge premiums are at higher risk of procedural disenrollment.
Nearly 400,000 losing Medicaid will fall into the coverage gap in the 12 states that have not expanded Medicaid. This includes parents of children in non-expansion states where eligibility is extremely low with nine of the 12 non-expansion states covering parents with income at or below half the poverty level – $959 in a family of three. Imagine trying to provide the basic necessities for your family – food, shelter, utilities, clothing, transportation – on an income of less than a $1,000 a month. Health insurance is clearly out financial reach for families in this income bracket.
Churning could be higher or lower than the typical churning estimates reported above. The report provides a range of estimates from no or low churning to high churning. Whether we end up with higher or lower churn depends on how each state approaches the unwinding and its timeline for completing the renewal process for all enrollees. Once again, where individuals live will have an impact on whether they retain coverage or become uninsured.
The possibility of 3.8 million children being disenrolled during the unwinding even though they remain eligible for Medicaid or CHIP threatens the historic gains we have achieved in covering children. In a separate report released earlier this month using data from the National Health Insurance Survey, ASPE noted that one million children, ages 0-17, gained coverage between late 2020 and early 2022 – reducing the uninsured rate from 6.4 percent to 3.7 percent, an historic milestone. Now consider this – the NHIS data indicates there were 2.7 million uninsured children in early 2022. With the latest estimate of 3.8 million children at risk of losing coverage during the unwinding – even though they remain eligible for Medicaid or CHIP – the number of children without health insurance could more than double (141 percent increase)! Now that’s a sobering thought!
[Visit our resource page for more information about the PHE unwinding.]