April showers bring May flowers, and May was abloom with health policy research. Last month, we read about the impact of ending pandemic-related coverage policies, consumer awareness of the resumption of Medicaid renewals, and approaches to tackling rising health care costs in commercial health insurance markets.

Caroline Hanson, Claire Hou, Allison Percy, Emily Vreeland, and Alexandra Minicozzi, Health Insurance For People Younger Than Age 65: Expiration Of Temporary Policies Projected To Reshuffle Coverage, 2023–33, Health Affairs. Researchers at the Congressional Budget Office’s (CBO) explain estimates regarding U.S. health insurance coverage distribution over the next ten years to determine the impact of the termination of coverage policies implemented during the COVID-19 pandemic.

What it Finds

• Medicaid enrollment grew from 60.5 million enrollees in 2019 to a record high 76.6 million enrollees in 2022. Approximately 20 percent of Medicaid enrollees in 2022 were enrolled due to the COVID-19-related policy in which states received a higher federal match if they allowed people to remain enrolled in Medicaid despite changes in eligibility.
  • With the unwinding of continuous Medicaid eligibility, Medicaid and CHIP enrollment will start to decline. Medicaid enrollment is expected to continue declining until 2025, when states are projected to finish redeterminations, at which time an estimated 71 million people will be enrolled in either Medicaid or the Children’s Health Insurance Program (CHIP). CHIP enrollment is projected to decline further in 2032, because current levels of funding will not be enough to cover all eligible children.
• CBO predicted that this year, Marketplace enrollment for people under 65 will be 15.1 million—a record for Marketplace enrollment and 1.8 million more enrollees than last year.
  • CBO estimated that 4 million Marketplace enrollees signed up because of enhanced subsidies, a number that is expected to reach 4.9 million by 2025. People with a lower income make up a significant portion of this population, attributable in part to the more generous subsidies for individuals with incomes under 200 percent FPL and the monthly special enrollment period (SEP) available in most states for individuals with incomes under 150 percent FPL.
  • When enhanced Marketplace subsidies expire in 2025, CBO projects that 4.9 million people will leave the Marketplace for employer-sponsored coverage, unsubsidized individual insurance, or become uninsured.
• CBO estimated that in 2023, the uninsurance rate is at a record low of 8.3 percent. By 2033, the uninsurance rate is expected to climb to 10.1 percent (still lower than the pre-pandemic uninsured rate of 12 percent in 2019).

Why it Matters

As pandemic-related coverage policies start to sunset, tens of millions of Americans will lose Medicaid and experience higher Marketplace premiums, and the currently record-low uninsured rate is expected to increase. Despite efforts to reduce coverage loss during the unwinding of continuous Medicaid, CBO projections suggest those may be insufficient to stem coverage losses. Further, the estimates are a wake-up call for policymakers to start planning for the end of enhanced Marketplace subsidies in 2025. However, CBO estimates also provide some hope: the uninsured rate is expected to be lower in 2033 than it was before the pandemic, suggesting some lasting benefits of pandemic-related policies to expand access to affordable coverage.

Ashley Kirzinger, Jennifer Tolbert, Lunna Lopes, Alex Montero, Robin Rudowitz, Kaye Pestaina, and Karen Pollitz, The Unwinding of Medicaid Continuous Enrollment: Knowledge and Experiences of Enrollees, KFF. KFF researchers surveyed Medicaid enrollees to assess current knowledge of and readiness for the unwinding of continuous Medicaid enrollment.

What it Finds

• Close to three-fourths of respondents (72 percent) were either unaware that states could begin disenrolling people from the Medicaid program or believed states did not have this authority. This proportion was higher among respondents age 65 and older and Black respondents.
• Almost half of respondents, and more than two-thirds age 65 and older, had never actively participated in a Medicaid renewal process.
• One-third of respondents reported that they had not provided up-to-date contact information to their state Medicaid agency in the past year, including nearly half of respondents age 65 and older.
• Respondents older than 30 preferred to receive renewal information via postal mail, while younger adults preferred receiving renewal information via email.
• One-tenth of respondents reported experiencing a change in income or other status that potentially makes them ineligible for Medicaid.
• Among respondents whose only source of coverage is Medicaid, 27 percent reported not knowing where to look for other health insurance if they lose Medicaid eligibility, and another 15 percent reported that they would be uninsured.
• Roughly 85 percent of respondents indicated that Navigators would be “very” or “somewhat” useful during the renewal process.

Why it Matters

Eighteen million people are expected to lose Medicaid during the unwinding of the continuous enrollment policy. This KFF study demonstrates that many enrollees are not prepared for the potential consequences of unwinding, underscoring the need for actions such as bolstering consumer outreach and education, increasing funding for Navigators and call centers, leveraging brokers, health plans, providers and other partners, and simplifying the process for enrollees to update their contact information. Variation in knowledge and experience across demographic groups suggests the need for targeted approaches to reduce coverage loss during the unwinding.

Robert A. Berenson and Robert B. Murray, Guiding the Invisible Hand: Practical Policy Steps to Limit Provider Prices in Commercial Health Insurance Markets, Urban Institute. Although U.S. policymakers have historically preferred an “invisible hand” approach to regulating health care prices, commercial insurers make high and rising payments to providers rather than negotiating to slow growth in health care costs. Researchers at the Urban Institute reviewed the evidence regarding the high and varied cost of health care in the U.S., and assessed the benefits and consequences of implementing either price caps or price growth limits to constrain provider prices commercial health insurance markets—policies currently viewed as a “light touch” alternative to rate setting.

What it Finds

• Provider prices are rising at a faster pace than service utilization—a 2022 CBO study found that service use rose 0.4 percent per year between 2013–2018, while prices paid to providers increased 2.7 percent per year during the same time period.
• Prices for physician and hospital services vary widely across geographic locations. A 2020 RAND study determined commercial insurer payments for hospital services in Indiana at nearly twice the rate of commercial insurer payments for the same services in the nearby state of Michigan.
• Price caps pose operational issues, such as whether the caps should be applied to each individual service or the weighted average of all services. They also raise compliance issues.
• Existing research suggests that using Medicare prices to set the benchmark rate is more effective than pegging the rate to commercial prices. However, given the population covered by Medicare, some adjustments will be required for services that are not frequently used by the Medicare population, such as maternity care.
• Price growth limits, despite their ability to prevent the sudden shocks of price caps, could worsen existing disparities in payment that currently exist in the healthcare industry. Some research suggests that growth limits should vary based on existing provider prices to avoid perpetuating the wide and often irrational variation in provider prices.
• Price growth limits also run the risk of incentivizing providers to up their service volume. This is one of the factors that led Maryland, a state that previously set a price growth limit, to instead establish hospital global budgets.
• The most successful contemporary adoption of price growth limits is in Rhode Island, which utilizes insurer rate review and approval processes to constrain provider rate increases by limiting annual premium increases and annual changes to contracted provider prices.

Why it Matters

The rising cost of health care in the U.S. is a nearly evergreen issue. While many have looked to price caps and price growth limits as an alternative to the “blunt instrument” of rate setting, the authors of this study assert that implementing these policies will not be as simple as some proponents have suggested. They will require significant commitment from policymakers and implementing officials to reduce spending (improving affordability) and lessen payment disparities between providers (fostering competition based on care quality and access). The authors also note that, because the federal government may not be able to act on this issue any time soon, tackling health care costs is a task that will likely continue to fall to states. Regardless, the evidence is clear that continuing to defer to market forces alone is not likely to bend the cost curve.