Millions of Americans Could Lose Health Benefits Under Medicaid Unwinding

For the past three years, millions of Americans covered under Medicaid, the government's health insurance program for people with low incomes, haven't had to worry about losing their benefits. It's common for Medicaid patients to lose coverage and reapply due to what's known as "churning" where a person's income or some other factor changes or they get bogged down in bureaucratic red tape during renewal processes. At the start of the Covid-19 Pandemic, Congress enacted a measure requiring states to keep people continuously enrolled in Medicaid in exchange for increased federal funding. That provision ended on March 31st, and states are beginning a massive unwinding process to redetermine eligibility.

Enrollment in Medicaid and the Children's Health Insurance Program had grown from 70 million when the pandemic started to over 92 million by December 2022. That's roughly one in four Americans. In fact, the US boasted a record-low uninsured rate of just 8% last year. Healthcare providers who advocate for low-income patients warn rolling back these coverage gains could interrupt lifesaving treatment. The Department of Health and Human Services estimates that as many as 15 million people could be disenrolled, including 6.8 million who are still eligible. Almost half the people who lose coverage will be Black or Hispanic.

Those most at risk of losing Medicaid benefits are patients who are the hardest to contact; they've moved in the last three years, lack internet or cell phones, don't speak or read English, or are disabled. Patients often discover they've been dropped when they're at the hospital or a doctor's office seeking care.

Losing insurance coverage can have potentially life-threatening impacts on people with chronic diseases like cancer or diabetes, who might not be able to get necessary treatment and prescriptions. It can cause others to delay preventive screening tests or forego care because they can't afford it, worsening their health and increasing the risk of complications.

According to the Kaiser Family Foundation, which tracks Medicaid closely, most states plan to complete their eligibility redeterminations within a year to 14 months. Five states, Arizona, Arkansas, Idaho, New Hampshire, and South Dakota, have already started to cut benefits. How many Americans lose coverage during this process depends on whether people can transition to other coverage. Some patients may be eligible for free plans under the Affordable Care Act depending on their income and whether a state has an expanded Medicaid program.

In addition to hurting patients, the Medicaid unwinding process could also significantly impact various sectors of the healthcare industry, some still recovering from the pandemic. Millions of Americans losing insurance coverage could reduce demand for prescription drugs, medical devices, diagnostic testing, and other care. Hospitals, particularly safety-net ones that serve large numbers of Medicaid patients, could see significant revenue reductions. Doctors and health insurers offering Medicaid plans could also suffer financial losses.