Marketplace Enrollment Among Those Losing Medicaid Coverage During Unwinding Increased by Nearly One-Third in the Second Month of Open Enrollment

As readers of Say Ahhh! know, I have been tracking monthly data (here, 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 March, CMS issued new data for December 2023, the second full month of the 2024 Open Enrollment Period.

In December, another 1.34 million people lost their Medicaid coverage due to unwinding of the Medicaid continuous coverage protection, of which 68.9 percent were procedural disenrollments and 31.1 percent were due to a finding of ineligibility.  Separately, CMS reported that 1.12 million 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 83.9 percent.  Both are highs by far since unwinding began.

Compared to total marketplace enrollment among those losing Medicaid in November, total December marketplace enrollment increased by another 31.3 percent.  As a result, the rate of marketplace enrollment among those disenrolled from Medicaid increased substantially, compared to 54.2 percent in November — the first month of the 2024 Open Enrollment Period — and 24.3 percent in October.  (In addition, another 28,200 or 2.1 percent enrolled in a Basic Health Plan in New York and Minnesota in December, with nearly all of that BHP enrollment occurring in New York.)  Cumulatively, through December 2023, compared to the 13.7 million people disenrolled from Medicaid, about 3.4 million or about 25 percent enrolled in marketplace plans.  (The figure rises to 26.8 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 December, it indicates that the cumulative transition rate to marketplace coverage is now significantly surpassing the expected pace, after months of falling well short.  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, after a gap in coverage, many eventually found their way to the marketplace during the 2024 Open Enrollment Period, which began on November 1, 2023.  Marketplace enrollment soared to a historic high of 21.45 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 will exceed the original 15 million projection from ASPE — with our latest data showing nearly 15.5 million people have already been disenrolled — and likely will exceed 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 overall according to our latest data — with many of those losing coverage, especially children, 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, while children’s enrollment in the marketplace rose to 2.16 million in the 2024 Open Enrollment Period, an increase of 611,000 — or about 39.5 percent — from the 2023 Open Enrollment Period, that increase offsets only a modest share of the 4.61 million in total net Medicaid enrollment losses among children (according to our latest data) since unwinding of the continuous coverage requirement began last year.  Moreover, children still account for only about 10.1 percent of total marketplace enrollment in 2024.

Marketplace plans will be a valuable source of affordable, comprehensive health coverage but that will likely be the case for only several million people — and a relatively modest number of children —who lost their Medicaid coverage during unwinding, despite the large increases in transitions to marketplace plans in November and in December, likely due to the start of the 2024 Open Enrollment Period.  Instead, it’s critical for state Medicaid programs to reduce the persistently high rates of procedural terminations as they finish the unwinding process in coming months and moving forward, as many beneficiaries, 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.