We have been wondering since the economic slowdown began, accelerated by COVID and the public health response, what it would mean to the insured medical consumer. The 2019-2020 slowdown offers the first opportunity to see if Medicaid expansion states offered a refuge from disenrollment in the commercial markets.
One would expect that enrollment in expansion states would expand dramatically as layoffs and loss of insurance coverage pushed people onto the Medicaid rolls. Non-expansion states would be expected to exhibit more moderate growth as enrollment is limited to the traditional categories of blind, disabled, pregnant women and children.
That isn't exactly what has happened. California, after disenrolling throughout the latter part of 2019 has experienced much slower enrollment growth than New York. Meanwhile, Texas and Florida, two non-expansion states, saw unprecedented monthly growth in the spring. There are likely a few forces at work here:
- As we saw with the extension of COBRA during the Great Recession, people in need of medical care will seek and retain coverage first. They will take advantage of eligibility categories available to the extent they are able. The healthy will dawdle, avoiding the administrative headaches while they see if they become employed again.
- Children now make up about half of all Medicaid enrollment and generally are eligible at higher income levels (200-300% of FPL). The loss of income, in whole or in part, in a two earner household might be enough to push the children into eligibility while keeping the adults un/under insured.
- California's budget woes have resulted in some eligibility cutbacks.
These trends suggest 2H 2020 might see some increased pressure on MLR for the leading Medicaid Managed Care organizations like ANTM, CNC and MOH. High acuity mix has already been reported by HCA and we are looking for similar commentary out of UNH tomorrow.
On a more positive note, Medicaid enrollment has slowed but absolute headcount is near post-ACA highs of 75 million.
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Managing Director – Health Policy