What Happens to the Uninsured Rate When Millions Lose Medicaid Coverage?

Not much.

Over the last 13 months, more than 20 million people have been disenrolled from Medicaid in what has become known as the “Great Unwinding,” one of the largest contractions of a social assistance program in U.S. history.

Beginning in April 2023, states restarted Medicaid eligibility checks that had been paused during the pandemic. Over the previous three years, Medicaid’s rolls had swelled from about 65 million to 86 million enrollees, causing federal and state spending to soar. A program originally intended to address the health needs of a few narrowly defined groups was covering more than 1 in 4 Americans.

Since the unwinding began, many enrollees have lost their coverage because their income is too high or their family structure has changed (e.g., minor children have become adults). Others have been dropped from the program for failing to provide adequate documentation of eligibility.

Last year, some observers predicted a public health catastrophe. The Medicaid unwinding, we were told, would cause the number of Americans without health insurance to surge, with disastrous consequences for vulnerable populations. Their logic was straightforward: Before the unwinding began, about 25 million Americans were uninsured. Adding another 20 million people implies a massive 80 percent increase in the uninsured rate.

But that calculation is far too simplistic.

Instead of spiking, the uninsured rate hasn’t budged. From March 2023 to April 2024 (the latest data available), the proportion of U.S. adults without coverage has held steady at 7.8 percent. In fact, some groups — including Blacks, Hispanics, and households with annual incomes below $25,000 — have reported gains in health coverage over the last year.

As I argued in an op-ed last summer, this shouldn’t be surprising. The vast majority of those leaving Medicaid had access to alternative sources of health insurance, usually from an employer. Decades of research shows that expanding public health insurance programs encourages people to drop their private coverage and enroll in the government plan. Economists call it “crowd-out.” What has unfolded over the last year is the same phenomenon in reverse: Ending Medicaid’s COVID largesse has shifted millions of people back onto private coverage.