On February 1, a handful of states began reassessing eligibility for their Medicaid population (a process known as “redetermination”) as a first step in ending the continuous coverage requirements of the Families First Coronavirus Relief Act (FFCRA). During the COVID-19 public health emergency, states received enhanced federal funding under the law in exchange for continuously covering all enrolled Medicaid beneficiaries.
FFCRA’s continuous coverage requirements will end on April 1, after which states can begin disenrolling individuals who are determined to no longer be eligible for Medicaid. Each state must redetermine eligibility for all people covered under Medicaid; that process can take 60 to 90 days per person. Throughout 2023, the federal government will incrementally phase out the enhanced funding that states received under FFCRA. This gradual approach may ease some of the financial pressure on states to quickly complete redeterminations.
Nationwide, about 15 million people are expected to lose Medicaid coverage as a result of redeterminations. More than half will be able to transition to employer-based plans or marketplace coverage. However, a large portion (45%) may be disenrolled for administrative reasons despite still being eligible. Many of those who will lose coverage are children and are likely to reenroll in Medicaid after being uninsured for some time. This kind of “churn” — that is, being on and off Medicaid — happened regularly before the COVID-19 public health emergency, often because of temporary increases in income or failure to submit information on time.
People in the 11 states that have not expanded Medicaid eligibility as allowed under the Affordable Care Act are likely to experience churn and are also more likely to fall in the “coverage gap.” This refers to people who earn too much to qualify for Medicaid but not enough to qualify for subsidies in the marketplace (subsidies begin at 100% of the federal poverty level, or at $14,580 for an individual). Most childless adults are not eligible for Medicaid in nonexpansion states; coverage for parents is available for those with very low income only (i.e., 16% to 88% of the federal poverty level, or $3,978 to $21,877 for a family of three).
Expected Impact of Medicaid Coverage Losses
Losing health insurance coverage will have a significant impact on people’s ability to access needed care and also will affect the financial health of providers and states’ economy. States that haven’t expanded Medicaid eligibility already have higher uninsured rates than those that have expanded. These differences are particularly stark in nonexpansion states in the South and Plains regions compared to neighboring expansion states.