BEYOND THE NUMBERS
When job and income losses threatened millions of people’s health coverage at the start of the COVID-19 pandemic, Congress took swift preventive action, passing a “continuous coverage” provision that has protected people against disruption in their Medicaid coverage during the public health emergency (PHE). Now Congress needs to act to protect people from becoming uninsured when the federal government ends the PHE. Fortunately, a timely opportunity is at hand: economic legislation that lawmakers are expected to craft in the weeks ahead.
When the PHE ends, states will resume their regular Medicaid processes and will have up to 14 months to review whether more than 80 million current enrollees remain eligible. It’s an enormous task that could cause as many as 15 million people to lose Medicaid coverage, the Urban Institute estimates, including as many as 6 million children. Some of those who lose coverage will still be eligible for Medicaid but will lose coverage due to paperwork issues, stretched state eligibility systems, and staffing shortages. Others will no longer be eligible for Medicaid, and while some in this group will be able to transition to subsidized coverage in the marketplace, others will become uninsured without congressional action.
The stakes are high: interruptions in coverage can be especially harmful for people enrolled in Medicaid, who are likelier to have chronic health conditions and need treatment more often than the general population.
While states have a central role to play in helping protect people from losing health coverage as they “unwind” their PHE policies, Congress must also do its part. Forthcoming economic legislation should:
Permanently close the Medicaid coverage gap in the 12 states that have refused to adopt the Affordable Care Act (ACA) Medicaid expansion. Unless Congress acts, people with incomes below the poverty line who lose Medicaid during the unwinding could end up in the coverage gap without an affordable path to coverage. This includes large numbers of young adults who have turned 19 and thus no longer qualify for Medicaid as children, people who received Medicaid during their pregnancy but are past their state’s postpartum eligibility timeline, and parents whose income has risen above their state’s very low income thresholds.
The median non-expansion state caps Medicaid eligibility for parents at about 40 percent of the poverty line, or just $8,800 in yearly income for a single parent with two children. In Texas, the state with the most people (766,000) in the coverage gap in 2019, parents lose Medicaid if they make more than 17 percent of the poverty line (only $3,733 annually). With income thresholds for parents so low in non-expansion states, it takes only a slight bump in income for parents to lose Medicaid eligibility and fall into the coverage gap.
Make the American Rescue Plan’s premium tax credit enhancements permanent to help many people who are no longer eligible for Medicaid afford private coverage. If the Rescue Plan’s enhancements expire at the end of this year as scheduled, plan premiums will rise, and people with low incomes who are no longer eligible for Medicaid after the PHE unwinding could become uninsured.
The enhanced premium tax credits reduce or eliminate marketplace premiums for millions of people in 2021 and 2022. People with incomes up to 150 percent of the poverty line ($32,940 for a family of three), for example, can get a marketplace plan with a reduced deductible and no premium payments at all.
About a third of the adults who are expected to lose Medicaid coverage at the end of the PHE could qualify for premium tax credits. But unless the Rescue Plan enhancements to those credits are made permanent, many low-income families who are no longer eligible for Medicaid might find marketplace coverage unaffordable and become uninsured.
If the expanded premium tax credits expire, current marketplace enrollees would also find coverage less affordable, so some of them would lose coverage as well; about 3 million people would lose marketplace coverage and become uninsured, according to a federal estimate.
Require 12 months of continuous eligibility for children and 12 months of postpartum coverage to protect and stabilize coverage for children and postpartum people. As state agencies review eligibility for tens of millions of Medicaid enrollees, millions of people could lose Medicaid coverage despite remaining eligible. Coverage loss could be especially detrimental for children and postpartum people, who could experience gaps in coverage or become uninsured during times in their lives when health care is particularly important. Providing all children with 12 months of continuous eligibility and ensuring that all states provide 12 months of postpartum coverage — provisions the House passed as part of Build Back Better — are proven mechanisms for keeping eligible children and postpartum people enrolled, reducing unnecessary and potentially harmful coverage gaps, and reducing paperwork burdens on both states and families.
As states evaluate eligibility for children, guaranteeing that they can stay in Medicaid for the next 12 months will lighten the burden on state agencies because they will not have to redetermine children’s eligibility if their family has a change in circumstances. Once a state determines a child is eligible, eligibility continues for 12 months and states generally don’t have to consider the family’s circumstances for 12 months, giving caseworkers more time to finish reviewing eligibility for other Medicaid beneficiaries. For families, 12-month continuous eligibility similarly means that once they have gone through the eligibility review for their children, they don’t have to contact the state agency when they experience modest changes in their circumstances. A fixed, 12-month eligibility period for children also provides a clear message for parents about what they need to do to keep their children connected to coverage.
Similarly, providing 12 months of postpartum coverage, which has important positive health effects, would allow states to avoid having to review the parents' eligibility only a short time after they give birth at a time when the state is working through a sizable number of eligibility reviews.
Some 32 states (including the District of Columbia) provide 12 months of continuous eligibility for children under 19 in Medicaid or the Children’s Health Insurance Program (CHIP), as of January 2022. And 27 states either extend or plan to extend postpartum coverage to 12 months, as of April 14, 2022. Making these policies a national standard would help keep children and postpartum people connected to coverage and ensure a more orderly process as the PHE ends.
There are many reasons to include these health provisions in economic legislation this year, including fulfilling the promise of the ACA by making health care more affordable for millions of people across our country — and preserving coverage during the PHE unwinding is yet another reason. To help protect as many people as possible from becoming uninsured and experiencing gaps in accessing health care at the end of the PHE, Congress should permanently close the Medicaid coverage gap, permanently extend enhanced premium tax credits, and provide stable Medicaid coverage to children and postpartum people as part of any final economic legislative agreement.