The Unwinding: Making Sense of Statistics

The Unwinding: Making Sense of Statistics

As we inch closer to the unwinding, the predictions of what the realities will be for Medicaid are beginning to pile up. These attempts to gain perspective and predict outcomes make sense, given Medicaid’s outsized role in fabric of our national health care system and the landscape of health and wellness in individual states and territories.

Here’s what we can say for certain: At the end of the public health emergency, some people are going to lose their Medicaid coverage. What’s less clear is exactly how many and which groups. The best thinkers in Washington, D.C. are trying to answer these questions, including the Urban Institute, Kaiser Family Foundation, and the Assistant Secretary for Planning and Evaluation. These research teams tackled these questions slightly differently – with different data, methods, and assumptions. We won’t know until the unwinding is officially over which estimates came closest to reality. But for now, it’s helpful to take a deeper dive into the methodology each effort used so we can better understand the data they produced.

Let’s look under the hood of a few of the most often quoted estimates:

• The Urban Institute: The Urban Institute’s March 2022 report projected that about 16 million individuals will no longer be covered by Medicaid after the public health emergency ends, which they assumed would happen in September 2022. From what we know today, the emergency declaration is going to continue until at least January 2023. With each passing month, enrollment continues to grow. In the authors’ own words, “the longer it lasts, the more people will be affected after it ends,” meaning the 16 million number is likely low. To come up with their numbers, Urban Institute used a Health Insurance Policy Simulation Model paired with the latest enrollment data from CMS and states. They trended that enrollment data forward to September 2022 to account for the fact that CMS enrollment data tends to have a 3- to 4-month lag.
• Kaiser Family Foundation: The Kaiser Family Foundation took a slightly different approach in their May 2022 analysis, offering a high and low scenario for coverage loss, including a significant jump from 5 million or 14 million. They arrive at these numbers by modeling two illustrative scenarios for enrollment loss: a 5% drop in total Medicaid enrollment or a 13% drop in enrollment. Although little detail is given about why these percentages were selected, the way they crunch the numbers is interesting. They compare a baseline model (what enrollment would have looked like absent the pandemic or continuous coverage requirement) to enrollment under the pandemic and continuous coverage scenario. Ultimately, this analysis runs into the same issue as we saw with the Urban Institute’s report: it assumes the public health emergency would already be over, so it undercounts the impact. This analysis looks at a related question: did the additional federal dollars that states got as a condition of keeping all members enrolled in Medicaid cover the added costs to the program? The short answer is yes – by quite a lot, actually. While the analysis found that federal dollars did cover costs, it didn’t ask or answer the question of how much the actual unwinding will cost to carry out. That’s a figure states expect to be significant, and those costs will hit state budgets after the federal funding expires.
• ASPE: The Assistant Secretary for Planning and Evaluation (ASPE) released the third and most recent estimate in August 2022. Their findings put coverage loss somewhere near the Urban study, estimating that 15 million people could no longer be enrolled in Medicaid. Similar to the other two, they assumed the emergency would be over by now. They arrive at those estimates using historical data from the Survey for Income and Program Participation, a longitudinal survey that follows individuals over multiple years. The data shows how people move between Medicaid and other sources of health insurance over time. They trended forward this historical data to project how many people would no longer be covered by Medicaid after the emergency.

This analysis also tries to answer another interesting question: How many people will lose coverage for administrative reasons? Nearly half (45%), according to their research – although some portion of these individuals will re-enroll within a year. This is not too surprising, given “churn” off the program and into Medicaid coverage again is a longstanding challenge. Medicaid members can lose their coverage for administrative reasons if they don’t receive notices at the correct address or understand what action to take, and they fail to complete required paperwork. Medicaid leaders are taking on these administrative challenges in partnership with CMS, health plans, and community organizations. They are reducing the number of people who need to fill out paperwork, getting updated addresses, and making notices easier to understand.

What’s Missed and What’s Next

The one thing these analyses don’t look at is a recession scenario. A recession would upend all these estimates since economic downturns increase the number of individuals who are covered by Medicaid. When more people are unemployed, more people qualify for insurance through the program. If we enter a recession before or right after the public health emergency ends, fewer people will lose their coverage. These higher-than-expected caseloads will impact state budgets. During the Great Recession in 2007 – 2009, Medicaid enrollment grew by about 12 percent (about 6 million people). We also know that it takes years following a recession for Medicaid caseloads to return to normal levels.

At the end of the day, we know millions will be impacted at the end of the public health emergency. That’s why Medicaid Directors, their partners, NAMD and the federal government have been working to prepare for 2+ years. We want people to make a smooth leap to other health insurance (like marketplace coverage), and we want to make sure everyone who is still eligible keeps their coverage and has access to the health care they need. With unwinding expected to begin early next year, these estimates are important reminders of the work still to be done and the real impact that it will have on individual lives and the health of our country.