About 30 million people were uninsured when the COVID-19 pandemic began in 2020. Despite expectations that the pandemic’s economic fallout would leave millions more uninsured, the latest federal data indicate that the U.S. uninsured rate among people under age 65 fell from a pandemic peak of 12.3 percent in late 2020 to 10.7 percent in the fall of 2021. This drop is likely the result of three factors:
- the Affordable Care Act’s (ACA) insurance expansions provided safety-net coverage for people who lost insurance
- the Families First Coronavirus Response Act (FFCRA) of 2020 required states to keep people continuously enrolled in Medicaid in exchange for enhanced federal matching funds through the end of the COVID-19 public health emergency (PHE)
- the American Rescue Plan Act (ARPA) of 2021 and actions by the Biden–Harris administration increased marketplace coverage subsidies and made it easier to enroll.
The result was record enrollment of nearly 84 million people in Medicaid and the Children’s Health Insurance Program through July 2021 and 14.5 million people in the marketplaces by January 2022.
However, these coverage gains are at risk. Why?
First, the PHE will eventually come to an end. Its termination will trigger the end of enhanced federal matching funds for state Medicaid programs along with continuous enrollment requirement for states. Under Medicaid rules, states will have to redetermine eligibility for everyone enrolled in the program. This is a gargantuan task. The Biden–Harris administration is giving states additional time to avoid mass coverage losses. It is widely anticipated that some states will take the full amount of time and proceed carefully, helping people who lose Medicaid find alternative coverage. Other states will be eager to reduce their caseloads and proceed quickly, raising the risk they will disenroll people who are still eligible, and provide little assistance to help people find new coverage. The Urban Institute estimates that 14.4 million to 15.8 million people could be disenrolled from the program, depending on when the PHE ends in 2022. This could lead to a temporary or permanent increase in the number of uninsured people.
The second reason recent coverage gains could reverse: the ARPA increased subsidies for marketplace plans only through the end of 2022. This means they will revert to prepandemic levels for the 2023 open-enrollment period. Commonwealth Fund surveys have consistently found that the main reason people do not enroll in a marketplace plan or drop coverage is expensive premiums. Failure to extend the ARPA subsidies is expected to lead to 3 million more uninsured people next year.
To make matters worse, these potential coverage losses will coincide with the loss of the federal funds that have paid for COVID-19 testing, treatment, and vaccination for uninsured people. This means that millions of uninsured people will likely avoid getting needed health care, including vaccination and testing for COVID-19. Those who do get care could face years of crushing medical debt. These outcomes are bad for families, for the health of the communities where they live and work, and for the productivity and long-term health of our economy.
Four short-term actions by Congress will maintain progress on coverage and give the uninsured access to COVID-19 services:
- make the ARPA marketplace tax credit enhancements permanent
- require states to conduct Medicaid eligibility redeterminations gradually and phase down the FFCRA enhanced Medicaid matching funds rather than eliminate them as soon as the PHE ends
- replenish the federal funds for COVID-19 testing, treatment, and vaccination of uninsured people
- provide a federal fallback option for people eligible for Medicaid in states that have yet to expand their programs.
In addition, we can apply the lessons from the pandemic and continue to fully deploy and build on the ACA to get more people covered. Congress could:
- make it easier for people to maintain Medicaid eligibility by giving states a continuous eligibility option without the need to apply for a waiver, similar to what is available for children in Medicaid and the Children’s Health Insurance Program
- maintain aggressive, targeted, and consistent outreach and enrollment efforts to reach the remaining uninsured and keep people covered
- enable people to autoenroll in coverage for which they are eligible.
The ACA and the federal government’s actions to help people get and stay covered proved to be essential weapons in the nation’s battle with COVID-19. But as the country faces a new wave of the omicron BA.2 subvariants, with millions of people still uninsured and millions more at risk of losing coverage, it is time to shore up these policies and further strengthen our health insurance safety net.