If You Lose Your Medicaid Coverage When the Public Health Emergency Ends, How Can You Stay Covered?

In February 2020, just before the COVID-19 pandemic struck the U.S. with full force, 71.2 million Americans were enrolled in Medicaid.^[0] By March 2022, Medicaid enrollment had swelled by more than 16.7 million to 87.9 million (almost half of them children), an increase of 23%.^[1] More than a quarter of the U.S. population is now on Medicaid.^[2]

The increase is thanks largely to the ACA Medicaid expansion, which, in the 38 states that have so far opted to enact it, extended Medicaid eligibility to adults with incomes of up to 138% of the Federal Poverty Level (as of 2022, that’s $1,563 per month for an individual, $2,106 for a couple, $3,191 for a family of four). As mass job losses began in March 2020, a lot of people fell below those thresholds.

It’s also thanks to the Families First Coronavirus Response Act, passed in March 2020, which increased the federal government’s share of states’ Medicaid costs. To get the increase, states had to agree to pause their normal, regular re-assessments of eligibility and resulting disenrollments as long as the Public Health Emergency declared by the federal government was in effect.

When the Public Health Emergency Ends, a Moratorium on Medicaid Disenrollments Will Also End

The federal government has not yet ended the Public Health Emergency – like the pandemic itself, it lingers on and on, extended in three-month increments. The earliest it can end is October 15, as the latest extension ends on July 15, and the government has promised states 60 days’ notice before ending it. But end it will, soon enough, at which point states will resume “redetermining” the eligibility of current enrollees, and disenrolling those whom they find to no longer qualify.

Given the huge backlog of cases to determine, the federal government has asked states to act with all due deliberation, allowing up to 14 months to complete the process^[3].

Some states will act swiftly, some slowly.^[4] Some will make a good faith effort to find those who don’t respond to a first notice – e.g., because they have moved – and some will eagerly disenroll all they can.

An Estimated 15 Million People May Lose Medicaid Coverage

One way or another, though, a lot of people will be disenrolled. The Urban Institute estimated in 2021 that about 15 million Medicaid enrollees will be disenrolled – returning total enrollment to about where it was on the eve of the pandemic.^[5]

What Can You Do to Keep Coverage if You’re Disenrolled From Medicaid?

If you are currently enrolled in Medicaid, what can you do to maintain health coverage for yourself – and your family, if more than one of you is enrolled? Most likely you will fall into one of these categories:

• You will provide updated income and household information to your state Medicaid program and be determined still eligible.
• You and all household members will lose Medicaid eligibility but will have access to an employer-sponsored health plan deemed “affordable” by government standards.
• You will lose Medicaid eligibility and not have access to an affordable employer sponsored plan but will be eligible for subsidized private plan coverage in the ACA marketplace.
• You will be determined ineligible for Medicaid, but your kids will remain eligible for Medicaid or CHIP, as the income eligibility thresholds for children are higher. In this case, adults may end up in employer-sponsored or ACA marketplace coverage, while the children are insured through Medicaid or CHIP.

Let’s take these possibilities one at a time.

1. You (and Family Members) Remain Eligible for Medicaid

If your income and household composition haven’t changed much (or your medical status, if you qualified for Aged/Blind/Disabled Medicaid), you will likely remain eligible. To maintain coverage, however, you need to make sure that your state Medicaid agency can find you (if you have moved, for example), and that you pay attention to any notices they send you, since enrollment will depend on providing required updated information.

Many people are intimidated or confused by government notices and tend to avoid or ignore them. Don’t do this. If you don’t fully understand what is being asked of you, call the phone number provided or find someone who can help you.

You Lose Medicaid Eligibility, and Your Employer (or Your Spouse’s Employer) offers affordable insurance

Millions of Americans lost their jobs when the pandemic triggered mass lockdowns in the spring of 2020, and many of them lost access to employer-sponsored health plans as well. Many of them ended up on Medicaid, as eligibility is based on current monthly income, and none of them have since been disenrolled unless they moved out of the state or requested a disenrollment.

Job recovery has been relatively swift, however, and most – though by no means all – employers offer health insurance to full-time employees and pick up the majority of the premium. According to the Urban Institute, about two-thirds of those who are disenrolled from Medicaid when the public health emergency ends will have access to employer-sponsored insurance.

On average, employers pay about 83% of a single employee’s premium, leaving about $100/month for the employee, and about 73% of the family premium, with employees contributing about $500/month.^[6] That varies quite a bit, however. Large employers tend to be more generous, and unfortunately, plans offered to lower-wage workers tend to be less generous.

If you are disenrolled from Medicaid, and your employer offers health insurance, you have a 30-day window to enroll in the employer plan (if your disenrollment doesn’t happen during your employer’s normal annual enrollment period).^[7] Do not hesitate to check what’s on offer and enroll if coverage is affordable (the process of “affordability” determination is explained below). If you miss the window, you will lose eligibility for ACA marketplace as well as employer-sponsored coverage until the next annual open enrollment period.

3. You Lose Medicaid Eligibility, and Your Employer Does Not Offer Affordable Coverage

If you are in this situation in 2022, you will almost certainly be eligible for subsidized coverage in the ACA individual marketplace. Marketplace subsidies are available to citizens or legally present non-citizens who lack access to other affordable coverage. Employer-sponsored insurance is deemed “affordable” if it provides minimum value as defined by the ACA, and if coverage for the employee alone costs less than about 10% of income.^[8] (The threshold varies slightly every year; this year it’s 9.61%.)^[9]

The American Rescue Plan, passed in March 2021, made marketplace subsidies much more generous through 2022.^[10] The ARP reduced the percentage of income required to buy the benchmark silver plan (the second cheapest silver plan in each market) at every income level and removed the ACA’s notorious income cap on subsidy eligibility, formerly 400% of the federal poverty level (currently $51,520 annually for an individual, $106,000 for a family of four).

At present, benchmark silver coverage with strong Cost Sharing Reduction (which reduces deductibles to an average of about $150) is available for free to enrollees with incomes up to 150% FPL ($19,320 for an individual, $39,750 for a family of four) and (with somewhat higher out-of-pocket costs) for no more than 2% of income for those with income in the 150-200% FPL range. At higher incomes, no one who’s eligible for marketplace subsidies (that is, lacks access to other insurance) pays more than 8.5% of income for a benchmark silver plan. High-deductible bronze plans can be much cheaper – free, even, for many higher-income enrollees.

The enhanced ARP subsidies may or may not be extended to years following this one.^[11] If not, the original ACA premium subsidies still cover the bulk of the premium for most enrollees, though they are not available for those with income over 400% FPL.

Subsidized marketplace coverage can be obtained through the government-run ACA exchanges. Thirty-three states use the federal exchange, HealthCare.gov, and 17 states plus Washington, D.C. run their own exchanges.^[12] The exchanges also direct you to no-cost enrollment help. Subsidized coverage can also be obtained through commercial exchanges, including the one on this site.

If you lose Medicaid coverage, you are granted a special enrollment period for the marketplace that begins 60 days before your Medicaid coverage ends and extends 60 days beyond that termination. Obviously, you will want to enroll in time to effectuate coverage before your Medicaid coverage ends (and marketplace coverage does not get backdated in this case, so enrolling after your Medicaid ends will result in a gap in coverage).

For enrollees with income below 150% FPL, marketplace enrollment in the states using HealthCare.gov and some state exchanges is currently year-round and doesn’t require a Special Enrollment Period.^[13] But that year-round enrollment is premised on the availability of zero-premium silver coverage, which will only continue beyond 2022 if Congress extends the ARP subsidies.

A “glitch” in marketplace eligibility for some families: The ACA’s affordability standard for employer-sponsored coverage, as interpreted by the IRS in 2012, leaves about 5 million people in families in a difficult situation known as the family glitch.^[14]

The glitch is as follows: If solo coverage for the employee is deemed affordable – that is, costs less than 9.61% of household income this year – the whole family is ineligible for marketplace subsidies, even if the employer’s family plan costs them more (sometimes far more) than that.

The Treasury this year has proposed a partial fix that should go into effect as of 2023: if the employer’s single-person plan is affordable but its family plan is not, the family members other than the employee will be eligible for marketplace subsidies.^[15] This is only a partial fix, as the family will have to pay the same percentage of income for coverage that it would if the employee were included, while the employee pays a separate premium for the employer-sponsored plan.

You and Your Partner Lose Medicaid Eligibility, but Your Children Remain Eligible for Medicaid or CHIP

If your income has risen since you were enrolled in Medicaid, or if it’s stayed the same but the household composition has changed – say, a child has grown up and is no longer a dependent – you may be found ineligible for Medicaid. But income eligibility thresholds are higher for children than for adults in Medicaid, and for higher income families, enrollment in the Children’s Health Insurance Program – which extends Medicaid eligibility to higher incomes, often with a buy-in — raises the threshold still further.

All states offer Medicaid to children in households with income up to at least 205% FPL, and in some states to as high as 405% FPL.^[16] For single-parent households in particular this can be a boon, as single-person employer-sponsored coverage is generally far cheaper than coverage for two or more family members. Many parents who lack access to employer-sponsored insurance and therefore enroll in ACA marketplace coverage find their kids enrolled in Medicaid or CHIP.

* * *

Switching from one form of health coverage to another requires vigilance – staying on top of government notices and requirements, and making sure they can find you – and diligence – checking out your options and moving fairly quickly to access affordable coverage.

The good news is that very few people are left without substantial help, from either the government or an employer, to pay for coverage. If you go through your options methodically, you should be able to enroll in comprehensive, affordable coverage.