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As Medicaid Unwinds, so Too Does Health Coverage for Many

Millions could be purged from Medicaid rolls as federal pandemic-era protections expire.

By Mark Wolf | August 16, 2023

When NCSL’s Kathryn Costanza asked legislators and staffers to respond with the first few words that came to mind when they thought about Medicaid “unwinding,” the responses hit the sweet spot that hovers between concern and distress:

Disorganized, complicated, confusing, massive, calamitous, overworked staff, headache, coverage lost.

As Medicaid unwinds—or returns to pre-pandemic coverage levels—millions of Americans are going to be unwound from their health insurance.

As Medicaid unwinds—or returns to pre-pandemic coverage levels—millions of Americans are going to be unwound from their health insurance.

When the COVID-19 pandemic hit, states were given enhanced federal funding for Medicaid. The price was states were required to provide continuous coverage for everyone in their Medicaid programs, Costanza, a program principal in NCSL’s Health Program, explained to a Legislative Summit session on “Tackling the Medicaid Unwinding Challenge.”

Medicaid enrollment surged during the pandemic to a record high of 94 million by the end of the emergency. Continuous coverage ended March 31 and states have up to 12 months to go back to their original enrollment standards.

“It’s important to note that we knew and anticipated that millions of people would lose Medicaid (under the unwinding),” says Jennifer Tolbert, director of state health reform for KFF (formerly Kaiser Family Foundation).

“Our estimates were that 17 million would be disenrolled during unwinding, some because they are no longer eligible, had increased income or a change of circumstances during the pandemic. But some were disenrolled because of procedural or paperwork, so states don’t know if they are eligible and they will be disenrolled anyway.”

States have new Medicaid requirements to continue receiving aid, including giving recipients 30 days’ notice before discontinuing coverage and denoting good-faith effort and multiple contact methods for renewals, Tolbert says.

States have taken a number of actions to facilitate this process, including direct outreach to enrollees, and reaching out to partners such as managed care, using other benefit programs and allowing self-attestation of income in certain instances.

The Centers for Medicare & Medicaid Services must release data on unwinding but the first release lagged by three months.

“Many states have been incredibly transparent in the process and are posting the monthly reports on their websites and many are creating dashboards with very informative data,” she says.

KFF is tracking all the data states have made public and, as of Aug. 14, over 4.5 million people have been disenrolled in 44 states and the District of Columbia.

“About 38% of renewals end up disenrolled,” Tolbert says. “We used a rate of 18% in our analysis, which suggests that if this percentage holds true, more like 35 million people will be disenrolled. But we don’t expect that rate to stay where it is.”

Larger states, she says, are processing more renewals so it’s likely they will be disenrolling more in a month than smaller states. Some states have prioritized renewals and flagged likely ineligibles early in the unwinding, and those individuals are expected to have a higher rate of disenrollment than those who weren’t flagged.

“It doesn’t explain it all,” she says, “but it is an important factor.”

Mark Wolf is a senior editor at NCSL.

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