Marketplace Enrollment Among Those Losing Medicaid Coverage During Unwinding Slowed in Last Month of Open Enrollment

As readers of Say Ahhh! know, I have been tracking monthly data (here, 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 April, CMS issued new data for January 2024, which was the last month of the 2024 Open Enrollment Period in nearly all states.

In January, another 1.15 million people lost their Medicaid coverage due to unwinding of the Medicaid continuous coverage protection, of which 67 percent were procedural disenrollments and 33 percent were due to a finding of ineligibility. Separately, CMS reported that nearly 484,000 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 42 percent.

Compared to total marketplace enrollment among those losing Medicaid in December, total January marketplace enrollment fell by 57 percent. As a result, the rate of marketplace enrollment among those disenrolled from Medicaid also decreased, compared to 83.9 percent in December — the second month of the 2024 Open Enrollment Period — and 54.2 percent in November, the first month of the Open Enrollment Period. (In addition, another 33,600 or 2.9 percent enrolled in a Basic Health Plan in New York and Minnesota in January, with nearly all of that BHP enrollment occurring in New York.) Cumulatively, through January 2024, compared to the 14.85 million people disenrolled from Medicaid, about 3.9 million or about 26.3 percent enrolled in marketplace plans. (The figure rises to 28.2 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 January, it indicates that the cumulative transition rate to marketplace coverage is significantly surpassing the expected pace, after many months of falling well short. What may have happened is that many people who were eligible for marketplace subsidies and 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 well exceed the original 15 million projection from ASPE and the 17 million projection from other analysts such as KFF — with our latest data showing 18.8 million people have already been disenrolled. 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 4.94 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 during the Open Enrollment Period months of November, December and January. As our recent analysis of child Medicaid enrollment data shows, through December 2023, there was wide variation in Medicaid/CHIP child enrollment declines among states during unwinding of the continuous coverage requirement. Some states prioritized rapid disenrollment of children and adults, had high rates of procedural terminations and low rates of ex parte renewals and as a result, had larger child enrollment declines. But other states took a different approach. They strove to maximize successful renewal of eligible children and are adopting strategies moving forward to keep eligible children enrolled and avoid inappropriate coverage losses upon renewal.

For example, as they finish unwinding and post-unwinding, states should further improve their ex parte renewal rates, ensure full compliance with all federal requirements for Medicaid renewals, and continue the renewal flexibilities that were provided by CMS during the unwinding process. Moreover, to further 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 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, including back to school campaigns, 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.