Coverage Reshuffling Anticipated as Pandemic Policies Unwind

In a paper published in Health Affairs,¹ researchers at the Congressional Budget Office (CBO) dug into this year’s estimated distribution of health insurance coverage for people younger than 65 years. They also explored how the end of pandemic policies will impact enrollment during the next several years and look even further ahead, projecting the distribution of coverage over the next decade. 

Coverage Losses Could Create Greater Need to Connect With Members 

This year, roughly 248 million people younger than 65 yearshave health insurance coverage—primarily through employment-based plans.¹ Another 23 million (8.3% of that same age group) are thought to be uninsured. The CBO researchers estimate that this year’s uninsurance rate will reach a record low as both Marketplace and Medicaid enrollment numbers have climbed to historically high levels. 

This low uninsurance rate can largely be attributed to the temporary policies that provided enhanced subsidies through the health insurance Marketplaces and kept beneficiaries enrolled in Medicaid, they noted.¹

Michael Stearns, MD, CPC, CRC, CFPC, specialized consulting director of medical informatics at Wolters Kluwer, pointed out that while the uninsurance rate has dropped for all income groups, it fell disproportionately for the lowest income populations.¹

For people with income below 150% of the poverty line, for instance, the CBO estimates that the rate of uninsurance decreased from 17% in 2019 to 10% this year compared to the more modest drop from 9% to 8% over that same timeframe for those with income at or above this 150% threshold.¹

Some notable shifts could occur as Medicaid continuous eligibility provisions unwind this year and next. According to the CBO report, over 9 million people in the 65 and under cohort are estimated to move to other types of coverage, and over 6 million are projected to become uninsured.¹

When this estimated 15 million plus people leave Medicaid as eligibility is redetermined over the next several years, this could lead to the heightened use of high-cost health care services like acute care facilities or emergency departments, Dr Stearns told First Report Managed Care.

Understanding the depth of these health insurance coverage losses ought to strengthen the resolve of managed care organizations (MCOs) to connect with their members, according to Steven Pollock, JD, President of DentaQuest, part of Sun Life US, which partners with MCOs and operates as a dental MCO in some states.

From a health equity vantage point, Mr Pollock indicated that MCOs should pay attention to the varied impact of coverage losses. People identifying as Hispanic have a higher uninsurance rate, for instance. To improve access to care for this population, MCOs “must tailor outreach and enrollment strategies to meet their unique needs,” he added.

Assuming the enhanced subsidies expire in 2025, about 5 million fewer people are projected to enroll in Marketplace coverage, transitioning instead to individual or employment-based insurance—or becoming uninsured. 

A Look Ahead: Projected Coverage Disbursement 2023-2033

Within the Health Affairs report,¹ the CBO provided projections for the next decade for the 3 biggest coverage categories for people younger than 65 years, including employment-based coverage, Medicaid and CHIP coverage, and nongroup coverage, in addition to predicting the road ahead for the uninsured population. 

According to these projections, employment-based coverage will continue as the main source of health insurance. Medicaid and Children’s Health Insurance Program (CHIP) enrollment is projected to decline through 2025 when states have completed redeterminations, at which point enrollment numbers are predicted to remain relatively stable. Nongroup enrollment is estimated to reach its peak in 2025 before dipping down for the next couple of years and then stabilizing.

The uninsured population, thought to be about 23 million this year, will likely increase from 2024 through 2027, the CBO report indicated. Following that stretch, this figure will likely stabilize at about 28 million through 2033. By this time, the estimated uninsurance rate will have climbed to over 10%. 

While higher than current levels, this figure is still below the roughly 12% seen in 2019 before the pandemic hit. “It just implies that though we’ve made progress from where we were before the pandemic, there are still people who’ve fallen through the cracks,” Kristen Ukeomah, a research assistant at Georgetown University’s Center on Health Insurance Reforms (CHIR), told First Report Managed Care. 

As people move from one form of coverage to another and as some become uninsured along the way, this is marking a massive period of transition, the likes of which haven’t been seen since the Affordable Care Act (ACA) was enacted, added JoAnn Volk, MA, a CHIR research professor.

Raising Awareness Could Play a Central Role as Policies Unwind

Ms Volk and Ms Ukeomah said that managed care leaders potentially play a crucial role in helping educate the public, considering not all Americans know—or fully understand—what is happening as pandemic-related health insurance policies start to sunset.

They highlighted a recent KFF survey brief,² for instance, that gathered a sense of Medicaid enrollee readiness for the renewal process and the possibility of disenrollment. The findings revealed that nearly 3 of every 4 respondents were either unaware that states can start disenrolling members from the Medicaid program or thought that states do not have this type of authority. 

“As states resume disenrollments following the end of the Medicaid continuous enrollment provision, many Medicaid enrollees have been unaware of and may not be prepared for the coming changes, particularly older enrollees and enrollees ages 18-29,” the brief stated. 

Roughly half of the enrollees indicated that they had not completed a renewal process in the past. As a result, they may not be looking for renewal reminders and might not be familiar with the steps they would need to take to keep their coverage, assuming they do remain eligible. 

Although just 1 in 10 enrollees indicated they experienced a life change that would probably make them ineligible, some were unsure. And plenty of people are expected to lose coverage during the unwinding period even though they will remain eligible, the brief added.

Ms Volk explained that there could be many instances of what is known as procedural terminations. Those who moved during the pandemic may never receive a notice asking for updated contact information, for example, and may only discover they have lost their health insurance coverage once they show up for a medical appointment.

Private Premiums, Market-place Benchmark Premiums Expected to Rise

The CBO report¹ estimates that insurer spending on per enrollee private health insurance premiums—a reflection of paid claims and administration—will jump up by (on average) 6.5% this year, 5.9% during 2024–25, 5.7% during 2026–27, and 4.6% during the 2028–33 timeframe. The higher growth rates anticipated in the short-term factor in a “bouncing back of medical spending” from the lower levels of utilization seen during the early parts of the pandemic. 

Meanwhile, trends tied to the Marketplace benchmark premiums will likely diverge somewhat from overall private health insurance.¹ These premiums are expected to rise by (on average) 5.4% during 2024–25, 9.3% during 2026–27, and 4.8% during 2028–33. 

“The enrollment of healthier-than-average people via the Marketplaces because of the enhanced subsidies will slightly dampen the growth of benchmark premiums relative to that of private health insurance premiums until those subsidies expire in 2026,” the report explained. 

The anticipated hike in benchmark premiums in 2026 and 2027 will extend beyond the growth of private premiums, while insurers react to the exit of healthier enrollees by raising prices above this underlying trend. After that, the rise of benchmark premiums is expected to resemble that of private insurance premium growth rates.¹

Weighing Report Projections Against Potential Policy Changes

Within their paper, the CBO researchers acknowledged the limitations of their projections, noting that they “reflect complex interactions among many entities—including federal and state policymakers, employers, households, and insurers—and are therefore inherently uncertain.” Future health care use and how insurers respond for setting their premiums is yet another source of uncertainty.¹

While this CBO report¹ may be helpful, Mr Pollock cautioned that it does not factor in probable policy changes. To help illustrate, he noted that the report predicts that CHIP enrollment will decline in 2032 and 2033 as CBO estimates that the current funding levels will not be sufficient to cover all eligible children. That said, Congress has consistently acted to support this program. For instance, CHIPRA, the ACA, and MACRA have all extended CHIP funding in recent years. As such, he said it is crucial for managed care leaders “to weigh the report’s projections against the likelihood of policy changes.” 

Perhaps even more critical, according to Mr Pollock, is what the report does not discuss: access to care. MCOs are intended to keep people healthy, which calls for continuity of care and coverage, as well as enough health care providers to meet demand. In addition to ensuring effective redetermination so that as many people are covered as possible, MCOs need to figure out how to get people the care they need by focusing on preventive
care and effectively connecting with members to support individual needs.¹ 

By addressing the study’s findings within the context of the overall industry, Mr Pollock added, managed care leaders “can enhance access to care, promote equitable coverage, and improve health outcomes for diverse populations.” 

References:

1. Hanson C, Hou C, Percy A, Vreeland E, Minicozzi A; Congressional Budget Office Coverage Team. Health Insurance For People Younger Than Age 65: Expiration Of Temporary Policies Projected To Reshuffle Coverage, 2023-33. Health Aff (Millwood). 2023;42(6):742-752. doi:10.1377/hlthaff.2023.00325

2. Kirzinger A, Tolbert J, Lopes L, et al. The Unwinding of Medicaid Continuous Enrollment: Knowledge and Experiences of Enrollees. KFF. Published May 24, 2023. Accessed August 2023. https://www.kff.org/medicaid/poll-finding/the-unwinding-of-medicaid-continuous-enrollment-knowledge-and-experiences-of-enrollees/