Marketplace Enrollment Among Those Losing Medicaid Coverage During Unwinding at Lowest Rate Since September 2023

As readers of Say Ahhh! know, I have been tracking monthly data (here, 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 May, CMS issued new data for February 2024, which was after the 2024 Open Enrollment Period had ended in nearly all states.

In February, another 1.24 million people lost their Medicaid coverage due to unwinding of the Medicaid continuous coverage protection, of which 64 percent were procedural disenrollments and 36 percent were due to a finding of ineligibility. Separately, CMS reported that more than 259,000 people who were either previously enrolled in Medicaid in federal marketplace states or had previously experienced a Medicaid denial or termination in state-based marketplace states selected a marketplace plan in February. That constituted about 20.9 percent.

Compared to total marketplace enrollment among those losing Medicaid in January, total February marketplace enrollment fell by 46.4 percent, after already falling by 57 percent between December and January. This was likely driven by the end of the Open Enrollment Period in nearly all states in January. As a result, the rate of marketplace enrollment among those disenrolled from Medicaid — 20.9 percent — was the lowest rate since September 2023, when the rate was only about 13.4 percent. (In addition, another 33,800 or 2.7 percent enrolled in a Basic Health Plan (BHP) in New York and Minnesota in February, with nearly all of that BHP enrollment occurring in New York.) Cumulatively, through February 2024, compared to the 16.09 million people disenrolled from Medicaid, about 4.16 million or nearly 25.9 percent enrolled in marketplace plans. That is a slight decline from the 26.3 cumulative transition rate in January. (The figure rises to 27.9 percent if including BHP  enrollment.)

As each of the blogs about previous CMS data releases noted, to provide context to these figures, federal researchers from the U.S. Department of Health and Human Services (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 February, it indicates that the cumulative transition rate to marketplace coverage has significantly surpassed the expected pace, although the rate fell from January due to the end of the 2024 Open Enrollment Period. 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. But with the end of open enrollment, many fewer people who had previously been disenrolled from Medicaid selected a marketplace plan, which was more in line with the transition rates prior to the start of 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 that 19.7 million people have already been disenrolled. And the share of total disenrollments that are procedural terminations remains very high — 69 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 5.13 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 are 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 that occurred during the Open Enrollment Period. As our recent analysis of child Medicaid and Children’s Health Insurance Program (CHIP) 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 and ensure full compliance with all federal requirements for Medicaid renewals. They should continue the renewal flexibilities that were provided by CMS during the unwinding process, which were recently extended by CMS through June 2025. (CMS also clarified that states can continue to adopt new flexibilities through next year as well.) They should also reduce application backlogs and ensure that applications are processed on a timely basis, including applications for re-enrollment among those who remained eligible but were disenrolled for procedural reasons during unwinding.

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. For example, states should 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, we recently released our snapshot of current state Medicaid and CHIP outreach resources and enrollment assistance. States and the federal government will need to work together on robust outreach and enrollment efforts in 2024, including preparing for back-to-school campaigns and campaigns in advance of the next marketplace Open Enrollment Period, in order 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. This includes continuing the direct outreach to beneficiaries and engagement of community partners that states conducted during unwinding as well as refreshing communications approaches and outreach messages tailored for those who were disenrolled during unwinding.

Author’s Note: This will likely be the last blog in this series. States began conducting redeterminations as early as March 2023 so Medicaid disenrollments and marketplace transitions reported for March 2024 (which will be released at the end of this month) could include some beneficiaries whose coverage is being renewed for a second time after the end of unwinding.

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