To Avoid Big Coverage Losses, Marketplaces Need to Prepare for the End of the Public Health Emergency

By Sabrina Corlette and Megan Houston

The COVID-19 pandemic will end, and with it the federal government is expected to lift the “Public Health Emergency” (PHE) first declared on January 31, 2020 and extended seven times since then. Allowing the PHE to expire is more than the symbolic end of the pandemic; it signals the termination of numerous policies that have had far-reaching effects across our health system, from vaccine coverage to the regulation and reimbursement of telehealth services. One of the most potentially disruptive changes will be the resumption of Medicaid eligibility redeterminations, which have been suspended for most of the pandemic.

The Urban Institute has projected that as many as 15 million people could lose their Medicaid eligibility (some argue that number could be even larger). If these individuals are not successfully transitioned into other forms of coverage, it could lead to a dramatic increase in uninsured, erasing the significant progress that has been made in the last year to boost coverage rates. The loss of Medicaid coverage is likely to disproportionately affect Black and Latino/a individuals, exacerbating existing and systemic inequities.

Thankfully, most people who lose Medicaid eligibility after the PHE ends will have access to other coverage options. The Affordable Care Act (ACA) marketplaces will likely absorb a large portion of disenrolled individuals, but need to start planning now to prevent people falling through the cracks.

How will the End of the Public Health Emergency Affect Coverage Rates?

In March of 2020, Congress enacted the Families First Coronavirus Response Act (FFCRA), the first of several pandemic relief packages. FFCRA included a provision temporarily increasing the federal government’s share of Medicaid payments to help states manage the COVID-19 public health emergency. States that take the extra federal funds must not impose any new restrictions on Medicaid eligibility and are prevented from terminating anyone from the program for the duration of the PHE. These protections, combined with pandemic-related losses of employer-sponsored insurance, increased Medicaid enrollment nationwide by more than 11 million between February 2020 and April 2021. This number is probably higher today, given FFCRA’s continuous coverage requirement.

The current PHE is scheduled to last until January 15, 2022, but given the devastating and ongoing effects of the COVID-19 Delta variant, the Biden administration could extend the PHE beyond that date. However, it has begun preparations for the inevitable end of the PHE, and provided guidance to state Medicaid agencies on the process for recommencing eligibility redeterminations. Although that guidance gives states up to 12 months to complete redeterminations, as FFCRA’s enhanced federal Medicaid funding expires, state Medicaid agencies will be under tremendous budgetary pressure to move quickly. Indeed, Ohio’s legislature has already required its Medicaid agency to complete its review within two months.

These dynamics could result in 15 million people losing their Medicaid coverage sometime in 2022. Many of these individuals will be eligible for Medicare or employer-sponsored insurance, and the Urban Institute estimates that one-third of adults losing Medicaid will be eligible for premium tax credits through the ACA marketplaces. That means it will be critically important for the marketplaces, whether federally or state-run, to help people navigate this coverage transition. At the same time, the potential enrollment surge could stretch the capacity and operations of the marketplaces and participating health plans, something they need to start planning for now.

Coverage Shifts Pose Opportunities and Challenges for the Marketplaces

The potential growth in marketplace enrollment presents an opportunity for the marketplaces to demonstrate that they can be a safety net for individuals who have incomes above the Medicaid cut-off but lack access to other sources of coverage. At the same time, an abrupt and dramatic growth in enrollment will pose challenges for marketplaces and their participating insurers, including:

  • Identifying eligible consumers. The marketplaces will need to receive data about consumers deemed ineligible for Medicaid but who could qualify for premium tax credits. However, many consumers may have changed addresses since they first applied for Medicaid, leaving both Medicaid and the Marketplace with out-of-date contact information. It’s also not uncommon for Medicaid applications to collect only mailing addresses but not email addresses or phone numbers. These data limitations could make it harder to conduct outreach to these individuals and help them enroll in coverage. Some of these consumers may not discover they are uninsured until they try to seek care, when it may be too late to enroll. Additionally, because people of color are more likely to experience employment or housing volatility due to structural racism, these individuals are more likely to suffer coverage losses resulting from any data shortfalls.
  • Automating enrollment. To reduce the number of people who start but do not complete the transition from a Medicaid plan to a marketplace plan, the marketplaces may want to explore automating as much of the process as possible, such as by pre-populating applications or using other trusted sources of data to make eligibility determinations and enable eligible consumers to consent to enrollment in a $0 premium plan.
  • Managing customer support. ACA marketplaces, consumer assisters, and insurers typically reduce their customer service capacity outside of the annual open enrollment season. Without adequate call center staffing and Navigator funding, transitioning individuals could face long wait times and be unable to obtain the assistance they’ll need. Many could become frustrated and give up.
  • Managing plan capacity and market stability. Many marketplace health plans have very narrow, HMO-style provider networks that are built around projections for future enrollment. If enrollment far exceeds their expectations, it could mean that the plan no longer has an adequate network to meet the demand. Similarly, if one insurer’s plan attracts the bulk of enrollment (i.e., because it is the lowest cost option in a given area), it may not have set premiums to accurately reflect the use of medical services by the newly enrolled, placing the insurer at financial risk. Many states have insurers that participate in both the Medicaid managed care market and the Marketplace. This could help ease coverage transitions, but regulators will want to monitor enrollment trends in real time in order to address any emerging problems.

It takes time to upgrade eligibility and enrollment systems, amend contracts with customer support vendors, expand grantmaking to the Navigator program, and design consumer education campaigns. It can take even more time when such changes need to be made in coordination with the federal government, state Medicaid agencies, departments of insurance, and participating insurers. Whether the PHE ends in January or well into 2022, the federal and state officials running the marketplaces need to begin their preparations now.

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The opinions expressed here are solely those of the individual blog post authors and do not represent the views of Georgetown University, the Center on Health Insurance Reforms, any organization that the author is affiliated with, or the opinions of any other author who publishes on this blog.