As Medicaid Redeterminations Loom, the PPACA Waits in the Wings

A few weeks ago, the director of the federal Center for Medicaid and CHIP (Children’s Health Insurance Program) Services noted that “the return of Medicaid eligibility checks is probably the most significant health coverage event since the passage of the (Patient Protection and) Affordable Care Act (PPACA).”

Now, think back to 2010, when President Obama signed the PPACA into law. I’d say that was quite a significant event indeed. So, let’s unpack this claim and take a closer look at what it may mean for healthcare consumers, providers, and the industry as a whole.

According to the Biden Administration, the federal COVID-19 public health emergency (PHE) will officially end on May 11, just about six weeks from now.

Among the biggest rollbacks that will take place as the PHE ends is the cessation of the Medicaid continuous coverage requirement, which directed states to keep Medicaid beneficiaries enrolled regardless of changes to their eligibility, in exchange for a boost in federal funding. When the requirement expires, states may resume income eligibility checks, or redeterminations, for the first time since 2020.

As such, Arizona, Arkansas, Idaho, New Hampshire, and South Dakota plan to be the first states to begin terminating Medicaid coverage this month for some of the tens of millions of people who remained covered under the Medicaid program during the pandemic. Fourteen more states will start terminating enrollees in May, followed by 20 states in June, and 10 in July. In October, Oregon will be the final state to start terminations.

The Centers for Medicare & Medicaid Services (CMS) estimates that over 15 million of the 92 million people enrolled in Medicaid will lose coverage throughout this process. That’s 16 percent of all Medicaid beneficiaries. Additionally, of these 15 million, 7 million are expected to remain eligible for the program, but still lose their coverage because of administrative or bureaucratic hurdles, such as missed or poorly written notices, incorrect paperwork, language barriers, lack of access for people with disabilities – the list goes on.

Another 8 million beneficiaries are projected to be flat-out ineligible because their income is too high, or because they’re able to qualify for employer-sponsored health insurance coverage.

It should go without saying that an insurance coverage loss of this magnitude will translate directly to a major loss of patients receiving healthcare services from providers. One of the more disheartening examples of this that I’ve seen is with regard to rural hospitals in states that continue to reject federal funding to expand Medicaid coverage.

A recent newspaper article noted that rural hospitals are struggling nationwide because of things like population decline, mounting labor costs, and a shift toward outpatient care. But those problems have been magnified by a political choice in certain states to reject the federal government’s offer to shoulder nearly the entire cost of expanding Medicaid coverage. This has piled added costs onto hospitals because they’re not legally allowed to turn patients away, regardless of insurance coverage status.

To illustrate, consider the following from the American Hospital Association (AHA), which claims that states that have opted against Medicaid expansion accounted for nearly three-fourths of all rural hospital closures between 2010 and 2021, where uncompensated care can cost upwards of $600 million a year. With figures like that, many of these hospitals and their provider staffs seem all but doomed.

Fortunately for many soon-to-be-uninsured Medicaid beneficiaries, the Affordable Care Act may once again be a saving grace. The New York Times recently reported a record-setting number of signups during the 2023 open enrollment period, during which the PPACA marketplaces saw over 16 million enrollees – 13 percent more than last year. Clearly, the marketplaces have become a much more attractive place for consumers, and for health plans to do business, largely due to upgraded subsidies, expanded choices, and enhanced market stability.

As a result, CMS says that one-third of the 15 million individuals expected to lose Medicaid coverage as eligibility checks resume will qualify for PPACA coverage with low or no premiums. Additionally, the American Rescue Plan of 2021, which contained the large-scale, national COVID stimulus package, also contained an expansion of the previously mentioned insurance subsidies, so people who lose Medicaid access can more easily than ever find an affordable plan on the exchanges.

And according to the U.S. Department of Health and Human Services (HHS), the government is actively collaborating with states to make sure beneficiaries don’t lose coverage because of administrative issues. They have also adopted new flexibilities for automatic renewal procedures and created new communications materials, reporting resources, and other tools to help processes run as smoothly as possible.

With more people now covered by the PPACA than ever, coupled with the impending addition of several million more enrollees coming over from the Medicaid rolls, health plans and providers now have an extraordinary opportunity to make a lasting impact on public health and the healthcare industry by encouraging consumers to take advantage of available resources, helping members stay informed and engaged in their own care, and supporting them in receiving timely and relevant care.

So, perhaps rollback of the Medicaid continuous coverage requirement will be a highly significant healthcare event, after all. Here’s hoping it’s for the better, but only time will tell. And time is something of which 15 million Medicaid beneficiaries are quickly running out.