Some people signed up last year as the pandemic’s economic fallout took away their jobs, income and health benefits. But according to federal health officials and other Medicaid experts, much of the increase is because of a rule change that was part of the first coronavirus relief law adopted by Congress last year.
That law created a trade-off: It gave states extra federal money to help cover what were anticipated to be ballooning Medicaid costs. In exchange, states needed to promise they would not remove anyone from their Medicaid rolls until the federal government ended the coronavirus public health emergency.
Taken together, the 15 percent spike means the size of the public insurance program for low-income Americans now significantly eclipses the nearly 63 million older Americans covered last year through Medicare. Both health insurance programs date to the mid-1960s and were pillars of Lyndon B. Johnson’s “Great Society” anti-poverty strategies.
“We’ve really seen how important Medicaid is to ensuring the overall health of our country and have seen this through the pandemic,” said Chiquita Brooks-LaSure, who became CMS administrator late last month.
“We are seeing what a lifeline the Medicaid program is to so, so many Americans,” she said in an interview Monday.
The Biden administration’s championing of Medicaid is a contrast to the policies of the Trump era. Brooks-LaSure’s predecessor at CMS under President Donald Trump, Seema Verma, encouraged states to require some people on Medicaid to work or prepare for a job in exchange for the insurance. Federal courts struck down the policy, ruling that it was incompatible with the Medicaid law’s main purpose of providing low-income people with coverage.
President Biden and his top health officials are working to extend insurance, focused on a dozen states that have not expanded Medicaid under the Affordable Care Act, while advocating other means to reduce the cadre of roughly 30 million Americans who are uninsured.
Unlike the Medicare program, Medicaid is a shared responsibility of the federal government and states, with the federal government paying part of the cost, depending on a state’s wealth, and setting some basic coverage rules. States decide the rest.
The report does not parse what share of the increased enrollment reflects people newly joining the Medicaid program as opposed to people not leaving the rolls as would ordinarily happen.
Matt Salo, executive director of the National Association of Medicaid Directors, said his group’s members in several states have been telling him much of the enrollment spike “is the gathering up of all the people who otherwise would be cycling or rotating off the program.”
Before the pandemic, Medicaid experienced considerable churn, with people cycling on and off as their incomes fluctuated. Under the rules adopted during the pandemic, states suspended periodic checks of whether participants remained eligible.
The Biden administration has said previously that the coronavirus public health emergency will continue at least through the end of this year — meaning the halt in eligibility checks will continue, too. Brooks-LaSure echoed that Monday.
Salo said the resumption of normal rules is likely to place burdens on states and Medicaid’s beneficiaries alike.
“If you have a large number of people going from coverage to no coverage . . . that’s a really bad situation for a lot of low-income folks. You definitely don’t want to flick a switch and have some huge number — 10 million? 15 million? — people go off the program,” Salo said. “It’s jarring. . . you want to minimize the mass disruption.”
Brooks-LaSure said CMS is working to ensure that state Medicaid officials handle eligibility reviews properly. Under the Trump administration, some states made it more difficult for people to verify whether they qualified to remain on the program.
“We are very focused on making sure we don’t lose our gains in coverage through unnecessary hoops,” she said.
Brooks-LaSure also said some people whose incomes have risen too high to stay on Medicaid would become eligible for private health plans sold through ACA insurance marketplaces. In the past, she said, “a lot of people are lost between that transition” from the public insurance to ACA health plans. “We should be getting whatever coverage they’re eligible for.”
The administration created an unprecedented special enrollment period that runs through August. For the last few years, the regular ACA enrollment time has run for six weeks, ending in mid-December.
Federal health officials said they did not have figures on how the extra enrollment has cost the federal government or states. However, one individual familiar with the program, speaking on the condition of anonymity, said the cost runs into the billions.
The new report shows that Medicaid’s sharp increase contrasts with relatively flat enrollment during the pandemic in the Children’s Health Insurance Program, another type of public insurance created in the late 1990s to help working-class families. Unlike with Medicaid, states have not been required to keep everyone on the children’s insurance program through the country’s public health emergency.
The two programs have a combined enrollment of 80.5 million.
January’s Medicaid enrollment of 73.8 million is the highest since CMS began keeping enrollment data in its current form in 2013. As a result, the report does not compare the current swollen rolls with the last time the United States went through severe economic strain — the Great Recession, officially from late 2007 to mid-2009, and the few years afterward.
Salo said, however, that the latest enrollment is doubtless higher than then because the earlier recession was before the Affordable Care Act allowed states to expand their Medicaid programs starting in 2014 to people with slightly higher incomes. The expansion allows people, including single adults, to join if they have incomes up to 138 percent of the poverty line — today, nearly $18,000 for a single person or almost $37,000 for a family of four.
As of the end of last year, states’ expansion of Medicaid had resulted in an additional 14.8 million people in the program who previously would not have been eligible, according to the Kaiser Family Foundation, a health-policy organization.
The Biden administration is eager to persuade the dozen states that have refrained from expanding their programs to change their minds. They are conservative states, primarily in the South, in which politicians have antipathy for the ACA.
The American Rescue Plan, the most recent coronavirus aid package that became law in March, includes a new, generous incentive for holdout states to broaden their safety net. The incentive would add extra federal aid for each person in the traditional part of a state’s Medicaid program, a larger group than the number of people likely to come in through an expansion.
There has been little public sign the offer is motivating those states to rethink their position.
Brooks-LaSure said Monday that she is in conversation with “a couple of states about how they want to move forward.” She did not identify them.
She said it takes time at the state level for Medicaid advocates to try to persuade governors and state legislators. “I wouldn’t be surprised if more states come in,” she said.