Marketplace Enrollment During Medicaid Unwinding Ticked Up in June but Remained Modest

I have been regularly reporting on monthly data (here and here) from the Centers for Medicare and Medicaid Services (CMS) on the number of people who were either previously enrolled in Medicaid or had experienced a denial or termination who then selected a marketplace plan.  At the end of September, CMS issued new data for June 2023.

In June, more than 1.6 million people lost their Medicaid coverage due to unwinding of the Medicaid continuous coverage protection, of which 74 percent were for procedural disenrollments and 26 percent were due to a finding of ineligibility.  Separately, CMS reported that nearly 175,000 people who were either previously enrolled in Medicaid in federal marketplace states or had experienced a denial or termination in state-based marketplace states selected a marketplace plan in the same month.  That constituted only about 10.7 percent.  While this was higher than the 7.5 percent for March and April and the 8.3 percent in May, marketplace enrollment among those losing Medicaid coverage remained modest in June.  (Another 33,000 or 2 percent enrolled in a Basic Health Plan in New York and Minnesota in June, with nearly all of that BHP enrollment occurring in New York.)

As I have written in the blogs about previous CMS data releases, 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.  While this data remains early, it indicates that marketplace transitions may still be falling short of the expected pace.  It is also important to note that CMS determined 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.

Marketplace plans will be a valuable source of affordable, comprehensive health coverage but only for a relatively modest number of people, especially children, who lose their Medicaid coverage during unwinding.  Instead, it’s critical for state Medicaid programs to reduce the high rates of procedural terminations for children, parents and other adults, most of whom are likely to remain eligible for Medicaid.  This includes states continuing to implement fixes to major problems in how they are conducting ex parte renewals for children and reinstating those who have improperly lost their Medicaid coverage as a result.  States should also pause procedural terminations as other unwinding problems arise.  Finally, state Medicaid programs and the federal government should work together to ensure 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.