As of June 2021, a record 31 million Americans have health coverage through the Affordable Care Act, with record high Medicaid expansion rates. As of December 2020, 14.8 million newly-eligible people enrolled in Medicaid through the ACA’s expansion of eligibility to adults.
“We did this together,” said Barack Obama in a brief Zoom chat with President Biden, whose administration built the health insurance marketplace. “We always talked about how, if we could get the principle of universal coverage established, we could then build on it.”
The rise in Medicaid enrollment is likely associated with job losses as a result of COVID-19, as more than 9.8 million Americans are currently out of work, and the significant national and state efforts to expand health care coverage to more people. For this reason, individuals who were previously ineligible for Medicaid may now be eligible for Medicaid.
Expanding health care coverage through policy changes
Passed by Congress in 2020, the Families First Coronavirus Response Act (FFCRA) approved a 6.2 percentage point increase in the federal match rate for state Medicaid programs on the basis that states provide continuous enrollment throughout the pandemic. Under these requirements, states are unable to disenroll people even if something such as a life change might make a beneficiary ineligible.
President Biden’s Fiscal Year (FY) 2022 Budget, approved in May 2021, calls on Congress to expand Medicaid coverage by making it easier for eligible people to get and stay covered, while also reducing deductibles and improving access to dental, hearing, and vision coverage, among other healthcare-related initiatives.
As of June 2021, 37 states and the District of Columbia have accepted federal funding to expand Medicaid under the Affordable Care Act. Expansion, which provides coverage to non-elderly adults with incomes below 138 percent of the federal poverty level, has provided Medicaid to over 12 million previously uninsured individuals, according to a report from the Center on Budget and Policy Priorities.
“We’ve seen through the pandemic what happens when people don’t have health insurance and how important it is,” said Chiquita Brooks-LaSure, Head of Centers for Medicare & Medicaid Services, to Kaiser Health News reporter Julie Rovner. “Our focus is going to be on making sure regulations and policies are going to be focused on improving coverage.”
Medicaid enrollment may continue to grow, as Brooks-LaSure hopes, due to the maintenance of eligibility (MOE) requirements included in the FFCRA, which are mandated by law. Under this condition, states cannot increase Medicaid premiums above those that were in effect on January 1, 2020. They must also allow continuous coverage for current enrollees during the public health emergency (PHE) period.
The U.S. Department of Health and Human Services (HHS) recently announced that the PHE declaration for COVID‑19 will be renewed for another 90 days, starting on April 21, 2020 and extending through July 19, 2021. The Biden Administration has notified states that the PHE will likely remain in place throughout the full calendar year of 2021 and that states will receive a 60-day notice before the end of the period, so they can prepare for the continuation of pre-PHE rules.
Preparing for costly changes in enrollment
Medicare spending and enrollment growth will depend on the trajectory of the pandemic, and the economic crisis associated with it, as well as the length of the PHE period. States projected an 8.2 percent growth for Medicaid enrollment in 2021 and as of March 2021, there is a 17.7 percent Medicaid enrollment increase for 36 states compared to February 2020.
Although many states predicted intense budget shortfalls due to the growth in Medicaid enrollment, most have experienced stable tax revenue during the pandemic. This is most likely due to the federal stimulus funding they received from the American Rescue Plan, which allowed them to invest resources in advancing health care access.
The federal policies have had a significant impact on healthcare changes, which has increased enrollment. Due to temporary marketplace premium tax credit enhancements, for example, individuals with income over 400 percent of the federal poverty line (FPL) are now eligible for federal tax credits. This law is in effect for 2021 and 2022, with the Biden Administration proposing to make these changes permanent.
Another law in the American Rescue Plan is an enhanced Federal Medical Assistance Percentage (FMAP) for Medicaid expansion. For the 12 states who have not expanded Medicaid, the law provides enhanced federal match to incentivize these health insurers to expand coverage to the adult population with incomes up to 138 percent of the FPL.
Once the PHE period ends, it’s predicted that states will resume eligibility renewals, potentially resulting in slower enrollment growth and decreased total spending growth.
Growth opportunities for payers
Amidst the changes in enrollment, payers have reported high profit growth in the first quarter of 2021. Health plans from companies such as UnitedHealth and Centene highly benefited from acute growth in Medicare and Medicaid membership. In order to keep members engaged and prevent subsequent re-enrollment, which can result in increased financial costs, payers are conducting targeted outreach.
Recently, a broad coalition of healthcare and employer groups announced the six steps they are taking to protect patients and achieve universal coverage:
- Expand eligibility criteria for Affordable Care Act (ACA) premium tax credits and cost-sharing.
- Advocate for greater federal funding to build more outreach and enrollment programs.
- Auto-enroll and renew eligible members for Medicaid and premium-free ACA marketplace plans.
- Provide incentives for additional states to adopt the Medicaid expansion.
Health plans are also focusing on social determinants of health (SDoH), collecting needs-assessment data, conducting outreach programs, and building specific pilot campaigns to tackle complex health and social challenges, which may help in retaining and acquiring new members.
SDoH issues encompassed over $2.5 billion in payer spending between 2017 and 2019, according to a 2020 study, so many payers are rethinking their SDoH strategy and looking for ways to better address non-medical needs.
Targeting SDoH with accountable networks
Right now, payers have the opportunity to actively address member needs by making social services more accessible. Payers can collaborate and support the work of CBOs by incentivizing providers to regularly screen for social risks and allocating financial resources to expand CBO resources. Additionally, payers can push for policies that prioritize solutions that address health disparities in an effort to improve health outcomes in high-risk populations.
At Healthify, we believe policy and partnerships are the key to expanding Medicaid coverage and making health insurance more affordable and more appealing. This is why we work with payers, providers, and CBOs to build long-lasting relationships that support population health.
Read more about our network and how we’re successfully working with payers and CBOs to align goals and achieve better health outcomes in personalized communities.