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Issue Brief: Unwinding the Medicaid Continuous Coverage Requirement - Transitioning to Employer-Sponsored Coverage (State Health & Value Strategies Cross-Post)

January 2023:

The following content is cross-posted from State Health and Value Strategies, published on January 19, 2023.
Authors: Elizabeth Lukanen and Robert Hest, SHADAC


Medicaid and the Children’s Health Insurance Program (CHIP) have played a key role in the response to the COVID-19 pandemic, providing a vital source of health coverage for millions of people. The Families First Coronavirus Response Act (FFCRA) implemented a continuous coverage requirement in Medicaid, coupled with an increase in federal payments to states. The requirement has prevented states from disenrolling Medicaid enrollees, except in limited circumstances, allowing millions of Americans continued access to healthcare services during the pandemic.

Enrollment in Medicaid and CHIP has grown sharply since February 2020, with more than 20 million enrollees added to state rosters as of September 2022. Continuous coverage can also likely be credited for the decrease in the number of people who were uninsured in 2021, down to 8.6% from a pre-pandemic level of 9.2% in 2019. This was driven by a 1.4 percentage point increase in public coverage in 2021, to 36.8% from 35.4% in 2019. These trends were mirrored across states, with 28 states experiencing significant decreases in their rates of uninsurance. Meanwhile, 36 states saw rising rates of public coverage with none seeing a decline in public coverage.

When the unwinding of the Medicaid continuous coverage requirement begins, states will restart eligibility redeterminations, and millions of Medicaid enrollees will be at risk of losing their coverage. Estimates vary, but most approximate that in the range of 15 million to 18 million people will lose Medicaid coverage, with some portion exiting because they are no longer eligible, some losing coverage due to administrative challenges despite continued eligibility, and some transitioning to another source of coverage. While much attention has been paid to how states can approach the unwinding of the continuous coverage requirement to prioritize the retention of Medicaid coverage and transitions to marketplace coverage, less attention has been paid to the role of employer-sponsored insurance.

To get a sense for the size of the group that might have employer-sponsored coverage as an option, this issue brief discusses the proportion of individuals with an offer of employer-sponsored coverage by income and state, and the proportion of those offers that are considered affordable based on premium cost. The issue brief also discusses the importance of a Medicaid disenrollment survey to monitor the coverage transitions associated with the unwinding.

A companion issue brief, Helping Consumers Navigate Medicaid, the Marketplace, and Employer Coverage, discusses how state Medicaid agencies, state-based marketplaces, labor departments, and employers can play critical roles in helping people understand and navigate their employer coverage options.

To support communications efforts during the unwinding, SHVS has also produced sample messaging for state departments of labor to share with the employer community which explains the unwinding and coverage options for employees.

 

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Medicaid and CHIP Medicaid Data and Tools for Health Policy Evaluation
Robert Wood Johnson Foundation
University of Minnesota
The State Health Access Data Assistance Center (SHADAC) is a program of the Robert Wood Johnson Foundation and a part of the Health Policy and Management Division of the School of Public Health at the University of Minnesota.
©2002-2023 Regents of the University of Minnesota. All rights reserved. The University of Minnesota is an Equal Opportunity Employer.
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