Dive Brief:
- The percentage of Americans without health insurance grew to 8.2% in the first quarter of this year as states culling their Medicaid rolls reversed a once-record low uninsurance rate, according to new Centers for Disease Control and Prevention data.
- The nation hit a historic low uninsurance rate of 7.2% last spring, thanks to COVID-19 era policies making it easier for people to access and afford coverage. However, the rate started ticking up in the back half of last year as states began removing ineligible beneficiaries from safety-net Medicaid coverage.
- An additional 1.6 million people lost coverage from January through March, bringing total Americans without insurance to 27.1 million, the CDC said.
Dive Insight:
States stopped checking Medicaid beneficaries’ eligibility for the coverage during the coronavirus pandemic in return for more generous federal funding. That agreement expired in April, freeing up state Medicaid departments to resume eligibility checks. To date, almost 25 million people have lost Medicaid coverage as a result, according to a tracker maintained by the health policy research firm KFF.
Roughly seven in ten of those people were removed from Medicaid not for actual ineligibility, but over administrative errors like missing paperwork, research has shown.
Many of those who lost Medicaid have turned to the Affordable Care Act exchanges for insurance, causing enrollment in the plans to swell to historic highs this year.
Growth in ACA rolls has benefited government plan-heavy insurers like Centene and Molina, even as their Medicaid business shrunk because of redeterminations. Revenue from ACA premiums has helped offset the worst losses from Medicaid, executives for the insurers said in second-quarter earnings calls.
Another factor that’s contributed to sharp ACA growth is heavy taxpayer subsidies for the coverage also put in place during the COVID pandemic. The slide in the nation’s insured rate could become steeper if those subsidies expire, according to health policy experts. Currently, the financial assistance is scheduled to end in 2025 absent congressional action.
The uninsured rate could hit 8.9% over the next decade because of Medicaid unwinding and the loss of the subsidies, according to recent projections from the Congressional Budget Office.
However, that’s still lower than the 10.3% of Americans that were uninsured in 2019 before the COVID-19 pandemic.
