Medicaid disenrollments might not lead to a large influx of new members for employer sponsored health plans

June 1, 2023

Instead of a long note on Friday, this week I’m spreading my posts through the week. Please let me know whether you’d rather this newsletter as one long note or 3-4 shorter notes.  

The Department of Health and Human Services has estimated that about 15 million will be dropped from Medicaid over the next year due to the expiration of the Pandemic Emergency. I have worried that this could mean an influx of new membership for employer health plans, as some employees or family members might have waived employer insurance as they remained on Medicaid.

Health Affairs published a projection from the Congressional Budget Office (CBO) this week that suggests the total number of members of employer sponsored health insurance will be relatively consistent over a ten-year period, and the rate of uninsured will increase from 8.4% to 10.2%.

Source: Hanson, et al Health Affairs May 24, 2023 LINK

Numbers do not add up to total population as there are some with other or duplicate coverage

This is consistent with the data from WTW’s Financial Benchmarking Survey, which showed that employee waiver rates did NOT go up from 2019-2023, and the proportion of employees covering dependents remained constant. Nonetheless, the CBO notes that 3.2 million of those losing Medicaid eligibility could newly obtain employer sponsored insurance coverage.

Implications for employers:

-        Most employers should not expect a substantial uptick in employees enrolling in their insurance plans. However, employers with many low wage workers might have increased take-up of insurance from employees or from dependents who waived this coverage when they were eligible for Medicaid.

-        Decreased Medicaid coverage could threaten the financial viability of some providers which are highly dependent on Medicaid, especially in rural areas.  This could lead to decreased access for residents in those areas who are covered by employer-sponsored insurance.

Note that I split my Friday post up through this week - let me know if you prefer EmployerCoverage as a single newsletter on Fridays.

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Thanks

Jeff