Understanding the Medicaid Unwinding Data: Marketplace Enrollment

On July 28, 2023, the Centers for Medicare and Medicaid Services (CMS) finally released renewal outcome data from the first two months — March and April 2023 — of unwinding of the Medicaid continuous coverage protection.  The data is largely consistent with data that we have already posted in our tracking of state administrative unwinding renewal data and with KFF tracking.  CMS, however, did include some limited preliminary data on marketplace enrollment that had not been previously available — from the federal marketplace (HealthCare.gov) and state-based marketplaces (SBMs).  CMS noted that “[m]any people leaving Medicaid or CHIP may transition to [m]arketplace coverage;” however, the early data is not promising.  More specific data on marketplace transitions is expected in September.

Federal marketplace: According to CMS, nearly 715,000 beneficiaries lost their Medicaid coverage in the 18 states that began unwinding renewals in April.  (Overall, about 2.2 million beneficiaries were due for renewals so there is a long way to go with roughly 90 million people enrolled in Medicaid or CHIP-funded Medicaid in April 2023.)

Separately, CMS reports that only about 68,000 people that could be identified as being enrolled in Medicaid or CHIP in March applied for marketplace coverage in HealthCare.gov states that started unwinding in April.  Of those, 84 percent were determined eligible for a marketplace plan and 15 percent were determined eligible or potentially eligible for Medicaid and CHIP.  Nearly 88 percent — or about 51,000 — of those determined eligible for a marketplace plan were determined eligible for premium subsidies.

But marketplace eligibility has not necessarily translated to enrollment in marketplace plans.  Only about 44,000 individuals actually selected a marketplace plan.  Notably, CMS makes clear that this federal marketplace data “does not represent Marketplace consumers who had a confirmed Medicaid/CHIP loss. Future reporting will look at coverage transitions for people who lost Medicaid/CHIP.”  In other words, these data are not limited to just those who were disenrolled from Medicaid and CHIP because they were determined to be ineligible or because they were terminated for procedural reasons.  The data also do not provide an age breakdown and as a result, it is unknown what share of these 44,000 people were children.

State-based marketplaces: In 13 states with their own marketplaces that began unwinding renewals in April and that reported data, about 45,000 people who had a Medicaid or CHIP denial or termination following renewal were determined eligible for a marketplace plan.  (There were about 81,000 account transfers from Medicaid and CHIP agencies to SBMs and about 73,000 SBM applications associated with people who had a Medicaid or CHIP denial or termination.)  72 percent were determined eligible for premium subsidies.

Yet only about 9,800 people selected a marketplace plan although CMS notes that additional individuals may have subsequently selected a marketplace plan (and their enrollment would appear in May or later data).  Like the federal marketplace data, it is unknown what share of these 9,800 people were children due to the absence of an age breakdown or other demographic data.

So of the 715,000 beneficiaries who lost their Medicaid coverage, only a total of about 54,000 people — that were either previously enrolled in Medicaid in March 2023 in federal marketplace states or had experienced a denial or termination in state-based marketplace states —  selected a marketplace plan in April.  That is less than 8 percent.  (As noted, CMS is expected to release more detailed data related to actual marketplace transitions among those losing Medicaid coverage due to unwinding.)

To provide context to these figures, last year, federal researchers projected that of the 15 million people expected to lose Medicaid during the unwinding, nearly 2.7 million people — or about 18 percent —would be eligible for subsidized marketplace coverage.  So while this data is early and incomplete, it indicates that marketplace transitions may be failing well short of even the expected pace.  It is also important to note that CMS also found that only 4 percent of people leaving Medicaid and CHIP in 2018-2019 in federal marketplace states subsequently enrolled in marketplace plans.  And of course, for children losing Medicaid, even with the enhanced marketplace subsidies, children accounted for only about 9 percent — or 1.55 million — of total marketplace enrollees during the 2023 Open Enrollment Period.

Any way you look at it, marketplace plans will likely be an alternative source of health coverage for only a modest number of people, especially for children, who lose their Medicaid coverage due to unwinding.   Instead, it’s critical for state Medicaid programs to reduce the massive number of procedural terminations involving low-income children, parents and other adults, most of whom are likely to remain eligible for Medicaid, as unwinding continues.  It’s also critical to make sure that eligible people who were terminated for procedural reasons are reenrolled in Medicaid as quickly as possible.

Edwin Park is a Research Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.