Uninsured rate shows little change amid Medicaid redeterminations

More than twice as many non-elderly Americans became uninsured from 2017 to 2019 as are projected to become uninsured from 2022 to 2024.

For the last five months, since some states began the redetermination process to remove individuals from Medicaid who had benefitted from COVID-era continuous coverage requirements but no longer meet eligibility criteria, some commentators and media outlets have been predicting a health care cataclysm.

“The number of uninsured Americans is about to jump dramatically for the first time in years,” blared one Vox headline in March. Shortly after, Axios warned of “a surge in the uninsured population.”

As I noted in an op-ed this week in The Hill, careful analyses contradict those dire predictions. The reason is simple: While millions are expected to lose Medicaid coverage, the vast majority — nearly 80 percent, according to the Urban Institute, and more than 95 percent, according to the U.S. Dept. of Health and Human Services — will quickly transition to alternative health plans obtained through their employer, another government program (e.g., the Children’s Health Insurance Program), or on the individual market.

Critics might retort, justifiably, that these forecasts may well be mistaken. Predicting complex dynamics of this kind requires somewhat speculative assumptions. To wit: even the highly-respected CBO has famously struggled to accurately foresee the coverage effects of the Affordable Care Act.

But we needn’t rely on projections. As of this week, the Kaiser Family Foundation reports that 5.7 million people have been disenrolled from Medicaid since March. If the doomsayers are right, these losses should have translated to steep increases in uninsurance rates, particularly in states that have moved swiftly to drop ineligible enrollees from their Medicaid programs.

The numbers tell a different story. According to the Census Bureau’s Household Pulse Survey, which asks respondents about their health coverage status at the time of the interview, the uninsurance rate for adults increased nationwide from 8.7% in March, before states began the redetermination process, to 9.1% in August. That works out to about 1 million additional uninsured people – remarkably close to the Urban Institute’s calculations. To put that in perspective, the number of uninsured adults in the U.S. increased by 1.1 million people from 2017 to 2018, and by an additional 2.5 million from 2018 to 2019. In short, the fluctuations we’re seeing are far from unusual.

Digging deeper, important facts emerge. For example, among low-income households (those earning <$35,000 per year), uninsurance rates actually declined from March to August. The same goes for people with disabilities. These patterns undermine the narrative that administrative errors and red tape are resulting in vulnerable populations losing coverage.

Nor is there much evidence of a partisan divide in how the redetermination process is unfolding. Of 20 solidly blue states (those that have always voted Democratic for president since 2008), nine saw declines in their uninsurance rates from March to August. Among the 20 solidly Republican states, almost the same number (eight) saw declines in their uninsurance rates.

Examining state-level changes debunks another myth. Some states, especially Arkansas and Texas, have been harshly criticized for allegedly conducting their Medicaid redeterminations too quickly and mistakenly terminating the coverage of thousands of eligible beneficiaries. The data gives no indication of widespread harm in these states. In fact, from March to August, Arkansas slashed its uninsurance rate by more than a quarter, while Texas’ uninsured population shrank as well.

Fears of surging uninsurance rates have led some states to slow-walk their redetermination processes, at substantial cost to taxpayers and potential harm to the neediest Medicaid beneficiaries. The evidence so far shows that those fears are largely misplaced.