Medicaid Enrollment Decline ProjectedMedicaid Enrollment Decline Projected The Congressional Budget Office (CBO) projects a significant decline in Medicaid enrollment over the next several years as the temporary pandemic-related continuous coverage requirement is phased out. The estimates indicate a drop of 18 million enrollees (18.6%) between 2023 and 2025, with childhood enrollment falling by 6 million to 31 million. Expected Increase in Uninsured Children CBO predicts that the Medicaid enrollment decline will lead to a rise in the number of uninsured children. It anticipates a 3 million increase in uninsured children by 2025 and an additional 3-4.6 million by 2027 due to the expiration of enhanced market subsidies. Procedural Terminations Drive Disenrollment A substantial proportion of Medicaid disenrollments (69%) are attributed to procedural terminations, indicating that many individuals are still eligible for Medicaid despite losing coverage during the phaseout. Policy Recommendations for Mitigation The CBO emphasizes that these enrollment projections are not fixed and can be mitigated through policy actions. Recommendations include: * Implementing 12-month rolling eligibility in Medicaid and CHIP. * Streamlining eligibility and enrollment processes. * Expanding multiyear continuous eligibility for children. * Improving ex parte renewal requirements. * Reducing application backlogs and ensuring timely processing. * Conducting outreach and enrollment efforts, particularly before the next marketplace open enrollment period. By implementing these policies, policymakers can offset enrollment losses and reduce the number of uninsured individuals, especially children.
The Congressional Budget Office (CBO) recently released its June 2024 Medicaid baseline. According to the CBO, total average monthly Medicaid enrollment (including both those receiving full benefits and those receiving partial benefits) is expected to decline by 18 million—or 18.6 percent—between federal budget years 2023 and 2025. Childhood Medicaid enrollment is expected to decline by 6 million—from 37 million in 2023 to 31 million in 2025—representing one-third of the total Medicaid enrollment losses. (The CBO separately released June 2024 baseline coverage estimates showing that average monthly Medicaid enrollment of children receiving only full benefits is expected to decline by 4.6 million over the same period.)
The CBO Medicaid baseline estimates are generally consistent with the most recent administrative Medicaid enrollment data, which show that net Medicaid enrollment for children has already fallen by 5.1 million since the phaseout began. As you might expect, CBO has written that the significant decline in Medicaid enrollment is largely driven by the phaseout of Medicaid’s temporary pandemic-related continuous coverage requirement.
While CBO did not provide an estimate of the resulting increase in the number of uninsured children, it did indicate that the total number of uninsured children, after reaching a historic low in 2023, is expected to increase by 3 million between 2023 and 2025, and by another 3 million and 4.6 million between 2025 and 2027 with the scheduled expiration of enhanced market subsidies after the end of calendar year 2025.
CBO also noted that a substantial percentage of the uninsured are eligible for Medicaid, subsidized marketplace coverage, and employer plans but are still not enrolled. It is highly likely that many of those who lose Medicaid during the phaseout, particularly children, will still be eligible for Medicaid. That’s because the share of total Medicaid phaseout disenrollments that are procedural terminations remains very high — 69 percent overall, according to our latest phaseout data. (Notably, CBO’s June 2024 Children’s Health Insurance Program (CHIP) baseline also projects no change in children’s CHIP enrollment, which remains flat at 7 million between 2023 and 2025, even though one might expect CHIP enrollment to increase as children previously enrolled in Medicaid become ineligible but are found to be income-eligible for CHIP. This is likely due to high rates of procedural disenrollment during settlement. Children who lose Medicaid for procedural reasons, rather than ineligibility, would not automatically be transferred to separate state CHIP programs if they are income-eligible for CHIP.)
However, as my colleague Sabrina Corlette of the Georgetown University Center on Health Insurance Reforms has written, these CBO baseline estimates are not predetermined, and policymakers can mitigate or prevent a substantial portion of these expected Medicaid disenrollments and resulting coverage losses. CBO notes that the requirement that all states implement a 12-month rolling eligibility in Medicaid and CHIP in all states starting January 1, 2024, and final regulations from the Centers for Medicare and Medicaid Services (CMS) streamlining eligibility and enrollment will modestly increase Medicaid enrollment over the next decade and offset some of the enrollment losses once the winding-down is complete. In other words, implementing additional policies that make it easier for more individuals and families to apply for, enroll in, and remain enrolled in Medicaid could increase Medicaid enrollment, relative to what CBO now predicts in its baseline, and could therefore reduce the number and rate of the uninsured below what is expected under the CBO baseline.
Such policies could include, for example, having more states implement multiyear continuous eligibility for children, which more states are adopting. State Medicaid programs could also continue to improve ex parte renewal requirements. They could reduce application backlogs and better ensure that applications are processed in a timely manner, including re-enrollment applications among those who remained eligible but were disenrolled for procedural reasons during the winding-down process. States and the federal government could also work together on robust outreach and enrollment efforts in 2024, including preparing back-to-school campaigns and other outreach efforts in advance of the marketplace’s next open enrollment period to target eligible children, as well as parents and other adults, who were disenrolled for procedural reasons so that they can be re-enrolled in Medicaid as quickly as possible.
