A health care cliff could leave millions without insurance
It was a well-intentioned intervention. But as no one is leaving the system and new people are signing up, Medicaid enrollments have increased, adding an estimated 22.2 million people to pre-pandemic levels. Last year’s $1.9 trillion Covid relief package also increased and expanded premium tax credits for Affordable Care Act insurance. As a result, registrations hit a record high of 14.5 million in 2022 and premium payments were halved for millions of registrants.
Such generosity can’t last forever, but the timelines for both programs are hazy. Although President Joe Biden’s administration has not officially announced an extension of the emergency beyond July, state officials expect it to last at least until October. The enhanced premium subsidies will expire by the end of the year, although insurers are already submitting their 2023 plans to state regulators. Uncertainty hardly helps matters.
Each time the health emergency ends, states will have to restart eligibility assessments for more than 80 million Medicaid recipients. The Kaiser Family Foundation estimates that 5.3 million to 14.2 million people could lose their coverage in the process. Some will no longer qualify due to changes in status, such as increased income. But even those who are still eligible may become uninsured due to administrative errors, as overstretched or undertrained staff rush to complete new determinations before the enhanced federal match ends. Poor record keeping and rickety computer systems have also hampered outreach efforts. The large number of people moving during the pandemic has left stacks of letters unopened, Medicaid’s primary method of communication.
Those no longer eligible for Medicaid could apply for coverage in the marketplace. But many won’t sign up because the process is just too confusing or the new costs are too high. The Urban Institute estimates that the expiration of enhanced tax credits could add hundreds of dollars to annual premium payments for the lowest earners and leave 3.1 million people uninsured.
To minimize the number of people who lose coverage, state and federal authorities will need to work cooperatively and methodically.
First, Congress should reinvigorate legislation that sets a fixed date for states to begin processing unsubscribes. The changing end of the public health emergency has made it difficult for states to prepare. Lawmakers should also allow the federal government to gradually reduce its supplemental payments to Medicaid, which would encourage states to slowly reassess their schedules, while ultimately reducing federal spending. Finally, states that have not enacted the Affordable Care Act provision that expands Medicaid coverage should do so. Without action, more than 2 million people fall into a coverage gap: too poor to qualify for premium tax credits, but with incomes above their state’s extremely low Medicaid eligibility thresholds.
Lawmakers can rarely resist too much of a good thing. But with the Covid crisis ebbing, the country needs to start getting back to normal. Ending these emergency programs – while easing the transition – is the right thing to do.
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The editors are members of the Bloomberg Opinion Editorial Board.
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