Marketplace Enrollment Among Those Losing Medicaid Coverage During Unwinding More than Doubled in November with Start of Open Enrollment Period

As readers of Say Ahhh! know, I have been tracking monthly data (here, here, here, here, here, 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 during unwinding who then selected a marketplace plan.  At the end of February, CMS issued new data for November 2023.

In November, another 1.58 million people lost their Medicaid coverage due to unwinding of the Medicaid continuous coverage protection, of which 68.2 percent were procedural disenrollments and 31.8 percent were due to a finding of ineligibility.  Separately, CMS reported that nearly 857,000 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 about 54.2 percent.

Compared to total marketplace enrollment among those losing Medicaid in October, November marketplace enrollment more than doubled — more than 118 percent higher.  As a result, the rate of marketplace enrollment among those disenrolled from Medicaid increased substantially, compared to 24.3 percent in October and only 13.4 percent in September. (In addition, another 38,500 or 2.4 percent enrolled in a Basic Health Plan in New York and Minnesota in October, with nearly all of that BHP enrollment occurring in New York.)  Cumulatively, through November 2023, compared to the 12.4 million people disenrolled from Medicaid, about 2.3 million or 18.6 percent enrolled in marketplace plans.  (The figure rises to 20.4 percent if including Basic Health Plan enrollment.)

As each of the blogs about previous CMS data releases noted, to provide context to these figures, federal researchers from the HHS Office of Assistant Secretary for Planning and Evaluation (ASPE) previously 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 represents only the outcome of unwinding through November, it indicates that the cumulative transition rate to marketplace coverage has finally caught up to the expected pace.  What may have happened is that many people who could have immediately enrolled in marketplace plans through a Special Enrollment Period after being disenrolled from Medicaid did not do so and became uninsured.  However, many eventually found their way to the marketplace once the 2024 Open Enrollment Period began on November 1, 2023.  Marketplace enrollment soared to a historic high of 21.3 million during the 2024 Open Enrollment Period.

Notably, at the current pace of disenrollments, the total number of people disenrolled from Medicaid once unwinding is completed is highly likely to far exceed the original 15 million projection from ASPE, and even the 17 million projection from other analysts such as KFF.  And the share of total disenrollments that are procedural terminations remains very high — 70 percent according to our latest data — with many of those losing coverage likely remaining eligible.  In comparison, ASPE estimated that 45 percent of those who would be disenrolled from Medicaid, including for procedural reasons, would remain eligible for Medicaid.  Finally, 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.  (Data on the child share of marketplace enrollees during the 2024 Open Enrollment Period is not yet available.)

Marketplace plans will be a valuable source of affordable, comprehensive health coverage but that will be the case for only a relatively modest number of people, especially children, who lose their Medicaid coverage during unwinding, despite the significant increase in transitions to marketplace plans in November.  Instead, it’s critical for state Medicaid programs, as they finish the unwinding process in coming months, to reduce the persistently high rates of procedural terminations for children, parents and other adults, many of whom, especially children, are likely to remain eligible for Medicaid.  This includes states continuing to increase ex parte renewal rates, ensuring full compliance with all federal requirements for Medicaid renewals, continuing the renewal flexibilities provided by CMS and taking up additional ones, such as pausing all Medicaid renewals for children for one year as Kentucky and North Carolina have done.

At the same time, to increase child Medicaid enrollment to offset these large coverage losses from unwinding, states should also take up various actionable strategies to promote continuous coverage for children and families, as recently reinforced in a CMS Informational Bulletin issued in December.  States should also take up multi-year continuous eligibility for children, which an increasing number of states are adopting, in addition to successfully implementing mandatory 12-months continuous eligibility for children which took effect on January 1, 2024.  Finally, states and the federal government will need to work together on robust outreach and enrollment efforts in 2024 to target eligible children, families and other adults who were disenrolled for procedural reasons so they can be 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.