Skip to main content
off the charts

Increased Medicaid Enrollment Underscores Need for Permanent Policies That Keep People Covered

Medicaid enrollment rose significantly during the COVID-19 pandemic, reflecting the program’s importance as a source of health coverage for millions and a safety net during times of increased hardship. State and federal policymakers should take proactive steps to maintain and expand gains in Medicaid coverage and improve its continuity and stability as the official end of the public health emergency (PHE) approaches.

Medicaid enrollment rose by 10 million — a 13.9 percent increase — from February 2020 to January 2021, the most recent enrollment report from the Centers for Medicare & Medicaid Services (CMS) shows. A record high of more than 80 million people, roughly one-quarter of the country’s population, had Medicaid coverage at the end of January 2021, including over 38 million children.

During the pandemic and economic crisis, many people turned to Medicaid after a sudden job loss or decrease in income. Others were already eligible and took steps to enroll because of increased awareness of the need for health coverage. Moreover, people have largely remained eligible during the pandemic, because the continuous coverage provision of the Families First Coronavirus Response Act required that states keep people covered through the PHE in order to receive an increase in federal Medicaid funding for their program as a whole.

Continuous coverage has prevented gaps in coverage that Medicaid-eligible people often face, for example when they don’t complete paperwork on time or their incomes fluctuate. It will likely stay in place through at least the end of the year when the official PHE is expected to end. Once that happens, states will have to review Medicaid eligibility for an unprecedented number of enrollees within a short period. If carried out improperly, these reviews could place large burdens on enrollees and Medicaid agencies alike and raise the risk that eligible people who have gained coverage during the pandemic will lose it due to confusion and the complexity of the renewal process.

States can act now to ease their administrative burden and make it more likely that eligible people will stay covered. They should ensure they have enrollees’ updated contact information, so they can gather any necessary follow-up information. States should maximize ex parte renewals — where an enrollee’s coverage is automatically renewed using electronic or existing data sources with no action required from the enrollee — and they should provide adequate staffing to address questions and process new information. States should also stagger case reviews, as CMS guidance allows, to make the large workload more manageable and avoid erroneously terminating eligible enrollees’ coverage.

Federal recovery legislation presents other important opportunities to improve Medicaid. An important lesson of the PHE is that the continuous coverage provision successfully kept millions of children and adults covered throughout the pandemic — a contrast to normal times, when many enrollees lose coverage within 12 months of approval due to small fluctuations in income or failure to provide paperwork on a tight timeframe. Rather than requiring states to resume pre-pandemic procedures, Congress should act to ensure low-income families have steady coverage in the future by requiring continuous eligibility for children and adults, which lets people maintain their Medicaid coverage for 12 months without interruption. Continuous eligibility reduces administrative costs and can lower health care expenses when enrollees receive regular care for chronic conditions and access preventative care, research shows.

Congress should also address the fact that roughly 2.2 million uninsured people with incomes below the poverty line — 60 percent of whom are people of color — do not have a pathway to affordable coverage because they don’t qualify for Medicaid under their states’ rules. Closing the Medicaid coverage gap would address long-standing racial and ethnic disparities in health care access. Because of these states’ refusal to expand Medicaid, adults with incomes below the poverty line in 12 states didn’t have access to health coverage, even during the pandemic.

Federal legislation should also provide permanent and adequate funding for Puerto Rico and other U.S. territories, so that their Medicaid programs can provide the same coverage that state Medicaid programs do. It should also improve Medicaid for people leaving jail and prison, who frequently have difficulty enrolling and accessing needed care.

As we celebrate Medicaid’s critical role during the crisis, more work needs to be done to further expand access and stabilize coverage for low-income people.