Resumption of Medicaid Eligibility Reassessments: Over 1 Million Enrollees Ages 50 to 64 Could Lose Their Benefits

A federal law passed in March 2020 at the beginning of the pandemic required state Medicaid programs to keep people enrolled in that health insurance program throughout the COVID-19 public health emergency (PHE). This policy—often referred to as continuous enrollment—has led to a record high Medicaid enrollment of over 84 million people as of October 2022.  Rates of uninsured Americans have also dropped to record levels, hitting a low of 8 percent in early 2022.  Overall, continuous enrollment helped ensure that tens of millions of people did not have to worry about losing health coverage during a time of health and economic uncertainty.

However, major changes are coming soon. A spending bill that passed at the end of 2022 is ending the continuous coverage protection and state Medicaid programs will once again be able to disenroll people who are no longer eligible starting on April 1, 2023 as the routine practice of reassessing enrollees’ eligibility at least once a year resumes.

The AARP Public Policy Institute (PPI) contracted with NORC at the University of Chicago to further examine the implications of the unwinding process for older Americans. NORC analyzed Medicaid enrollment trends for the age 50-64 population prior to and during the public health emergency and used this data to model the impact of resuming Medicaid eligibility reassessments, or redeterminations, in this population. This paper discusses these findings as well as their context within the larger health care system. We also provide an overview of federal and state actions taken in advance of the April 1 changeover date and discuss policy options that could help ease the transition.

Impact on the Age 50-64 Population

Previous analyses suggest that between five percent and 17.5 percent of Medicaid enrollees could lose coverage during this “unwinding” process. Our analysis predicts that the unwinding process could result in one million people ages 50 to 64 being dropped from Medicaid over the next year, from approximately 12.2 million as of March 31, 2023 to an estimated 11.2 million on April 1, 2024. Owing to the unique factors associated with the PHE, this may be an underestimate of the numbers of older adults who will lose their coverage.

Other Coverage Options, and Connecting Consumers to Them

Some people who no longer qualify for Medicaid may have access to health insurance coverage through their job or employer. Also, people who lose Medicaid eligibility due to having higher income may be eligible for financial assistance to help pay for the cost of a private health insurance plan on the Health Insurance Marketplace (Marketplace), created by the Affordable Care Act.

In fact, almost one-third of individuals who lose Medicaid coverage will qualify for Marketplace premium assistance, according to one analysis. The majority of these individuals (60 percent) may be eligible to have their premiums fully covered, helping to make them much more affordable.

Federal and State Government Efforts

Federal- and state-level agencies have been actively working to prepare for the unwinding.

For example, many but not all states use available data to reduce the amount of information enrollees need to submit, and some states have focused on improving data use and implementing other system upgrades in the last few years. States have also employed varying approaches to education and outreach and making information public.

States and the federal government are also working to ease the transition from Medicaid to the Marketplace for those who are no longer eligible for Medicaid. The federal government has put in place several policies including financial assistance, enrollment windows, and connections between the Medicaid and Marketplace eligibility processes. State Medicaid officials have been working closely with their Marketplace counterparts, and both states and the federal government have been developing communication strategies to help ensure that people who lose Medicaid are aware of Marketplace coverage options and the availability of financial assistance.

Amid these varying state efforts, and even despite the more proactive ones, many people may remain unaware of the upcoming changes.

Additional Efforts Needed

Individuals who lose health insurance coverage completely, even for short periods (sometimes referred to as “churn”), are likely to experience adverse impacts both financial and medical. Loss of health care coverage leads people to skip needed care and incur high financial costs to pay for the care they do get.  

These stakes are also higher for those ages 50-64 than for younger groups:

• Twenty percent of 50-to-64-year-olds report being in fair to poor health, compared to 11 percent for those ages 18-49. For those who make less than $25,000 a year, this number rises to 48 percent.
• People ages 54-64 also report higher rates of multiple common chronic health conditions compared to younger cohorts.

Given the implications for millions of individuals, as well as the increased reliance on Medicaid among the 50-64 population, policymakers should ensure that the unwinding/Medicaid redetermination process goes as smoothly as possible.