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Medicaid Insurers See Growth as More Enrollees Stay on Program

July 8, 2020, 9:31 AM

Efforts by federal lawmakers and states to reduce the number of people being kicked off Medicaid during the Covid-19 pandemic are playing a big role in the program’s surge in enrollment, insurers say.

Insurers like Anthem Inc. that operate Medicaid managed care plans point to a provision in the Families First Coronavirus Relief Act, enacted in March, that requires states to keep beneficiaries on the rolls during the public health emergency.

States periodically re-verify the eligibility of adult beneficiaries, which can lead to people losing coverage because of paperwork problems or short-term changes in income. Most states do this annually, but some do frequent income checks.

The shift in approach comes as Medicaid takes on a greater role in providing health coverage to the nation’s poor amid the Covid-19 pandemic and as more states move to expand their state Medicaid programs.

Nearly 71 million people were enrolled in Medicaid and the Children’s Health Insurance Program in March, the most recent data available from the Centers for Medicare & Medicaid Services. The most recent data from the agency shows enrollment increased by 314,594 from February to March, according to a CMS spokeswoman.

States Expand Options

Meanwhile, Oklahoma is in line to become the 37th jurisdiction to expand its Medicaid program after the state’s voters last month approved an amendment to the state’s Constitution. The measure will allow the state to cover at least 178,000 more low-income adults.

Anthem, which operates Medicaid managed care plans in 24 markets, experienced enrollment growth of slightly more than 400,000 through the end of May, Felicia Norwood, president of Anthem’s government business division, said at a recent conference held by BMO Capital Markets.

That increase is largely the result of the Families First law’s prohibition on states that receive increased federal Medicaid matching funds from terminating beneficiaries until the end of the public health emergency period, she said. The Affordable Care Act provided an enhanced match for states that expanded their Medicaid programs.

Medicaid, which was initially operated by states, is now predominantly a program of managed care plans operated by health insurers, according to a report from America’s Health Insurance Plans. As of 2018 more than 75% of all Medicaid enrollees—more than 56 million people—were enrolled in a Medicaid managed care plan, it said.

Uncertainty Remains

“There remains considerable uncertainty around the shape and timing certainly of the eventual recovery, but we will have a meaningful uptick in our Medicaid membership as we go across the next few months,” Norwood said at the BMO conference. “We expect to continue to see about 40-50% of the unemployed enrolled in Medicaid.”

More than 40 million Americans have lost employment since March.

Meanwhile, the Obamacare expansion bill that the House passed June 29 could significantly expand Medicaid and Medicaid managed care plans by limiting states’ ability to remove people from the programs.

A provision in the Patient Protection and Affordable Care Enhancement Act (H.R.1425) would require Medicaid and CHIP to provide continuous coverage to all beneficiaries for at least 12 months.

The Obamacare enhancement bill isn’t expected to be passed by the Republican-led Senate. But some groups, such as the Association for Community Affiliated Plans (ACAP), are advocating to make the continuous coverage provision permanent, Margaret Murray, chief executive officer of ACAP, said in an interview.

ACAP represents 77 nonprofit Medicaid managed care plans that cover about 20 million people in 27 states.

The Congressional Budget Office estimates that providing 12 months of continuous coverage eligibility for Medicaid and CHIP would cost the federal government $204.9 billion over 10 years and $58.3 billion over five years.

In the 24 states that allow 12-month continuous coverage for children in low-income families, close to 300,000 children received at least one preventive care visit because they were kept on the program, Murray said, citing a study recently conducted for ACAP by George Washington University.

Will ‘Emergency’ Be Extended?

The continuous coverage provision in the First Families law is set to expire when the public health emergency ends, which is scheduled for July 27, Murray said. ACAP wants to see the administration extend the emergency period, she said.

Michael Caputo, assistant secretary for public affairs at the Department of Health and Human Services, tweeted June 29 that the HHS expects to renew the public health emergency before it expires.

Ninety percent of ACAP members surveyed in May expected a surge in Medicaid enrollment of between 5% and 10%, Murray said.

The plans are experiencing increased enrollment and, like Anthem, the increase is mostly related to the First Families law provision prohibiting states from dis-enrolling Medicaid beneficiaries, she said.

To contact the reporter on this story: Sara Hansard in Washington at shansard@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Brent Bierman at bbierman@bloomberglaw.com

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