On May 24, 2023, the Congressional Budget Office issued new health coverage estimates for people under age 65 through a Health Affairs article and an updated May 2023 “Federal Subsidies for Health Insurance Coverage” baseline. The estimates show the expected adverse impact of unwinding of the Medicaid continuous coverage protection in substantially reducing Medicaid enrollment and increasing the number of uninsured, including among children. Key highlights of these CBO estimates include:
- The uninsured rate among all non-elderly individuals is expected to be at a historic low of 8.3 percent in calendar year 2023, driven by coverage gains due to the Medicaid continuous coverage protection and enhanced marketplace subsidies. According to CBO, the uninsured rate among people with incomes below 150 percent of the federal poverty line fell from 17 percent in 2019 to 10 percent in 2023. In comparison, the uninsured rate among people with incomes at or above 150 percent of the federal poverty line declined from 9 percent to 8 percent over the same time period.
- With unwinding, CBO expects 15.5 million low-income Medicaid beneficiaries, who have remained enrolled due to the continuous coverage protection, to lose their Medicaid coverage over an 18-month period starting in April 2023. About one-third, or about five million, are estimated to be children. This would include both those who are determined to be no longer eligible and those who remain eligible but are disenrolled for procedural reasons. CBO estimates that 6.2 million — or 40 percent — of those losing Medicaid coverage will end up uninsured. (According to CBO, about 50 percent will either newly enroll in employer-based coverage or if they had both Medicaid and employer-based coverage to switch to only employer-based coverage. The remaining 10 percent will newly enroll in marketplace or other individual market coverage.)
- CBO notes that the resulting reduction in Medicaid enrollment would be even larger but for two factors. First, as part of the Consolidated Appropriations Act, 2023, all states are required to adopt 12-months continuous eligibility for children in both Medicaid and CHIP on January 1, 2024. Second, last year, the Centers for Medicare and Medicaid Services issued a proposed rule that would streamline application, enrollment and renewal in Medicaid and CHIP. (Our public comments to the proposed rule are here.) As 12-months continuous eligibility for children is implemented in states that have not already adopted it, and if the proposed eligibility and enrollment rule is finalized, both would have an offsetting effect to unwinding by increasing Medicaid enrollment among eligible children and other individuals over time.
- Over a somewhat longer timeframe, CBO overall expects that between calendar year 2022 and calendar year 2025, total Medicaid enrollment among people under age 65 will decline by 12.3 million. Children will comprise the largest share — about 38 percent — of these enrollment losses, with 4.7 million fewer children enrolled in Medicaid. The number of uninsured will rise by 2.7 million and the uninsured rate will increase by 1.4 percentage points to 9.7 percent. (Notably, because CBO uses a probabilistic estimate for proposed rules, if the eligibility and enrollment rule is finalized “as-is”, the Medicaid enrollment reductions and the increases in the number of uninsured would both be smaller.)
As CBO notes, there is considerable uncertainty related to these coverage estimates, in part due to how state and federal policymakers will approach unwinding of the Medicaid continuous coverage protection. It is clear from the early data from states that have already started unwinding and instituting procedural terminations that there is wide variation in how well states are handling unwinding. For example, in three states — Arkansas, Florida and Indiana — roughly half of beneficiaries who have gone through the redetermination process have been terminated and more than 80 percent lost coverage for procedural reasons, not because they were determined to be ineligible. In comparison, in other states like Arizona, Pennsylvania, and Virginia, only 10-20 percent of beneficiaries undergoing redetermination have been terminated, and in Pennsylvania less than half lost coverage for procedural reasons. In other words, the Medicaid enrollment losses and increases in the uninsured resulting from unwinding that CBO estimates could be considerably lower if states take necessary steps to maximize retention (including among children) and to minimize procedural terminations. This includes temporarily pausing terminations of coverage when appropriate.