Analysis | A Health-Care Cliff Could Leave Millions Uninsured

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Since early 2020, the US has been under an official public-health emergency. In July, after 30 months, it is scheduled to end. One unanticipated consequence is that millions of Americans could lose their health insurance.

The root of the problem is the extraordinary spending spree Congress embarked on to address the pandemic. As Covid-19 spread and businesses shut, a wave of job losses left millions of Americans without employer-sponsored health coverage. To avert a fiscal crisis as the newly uninsured flocked to Medicaid, the federal government offered states extra funding so long as they didn’t boot anyone off the program during the public-health emergency.

It was a well-intentioned intervention. But with no one leaving the system and new people signing up, Medicaid enrollment surged — adding an estimated 22.2 million people to pre-pandemic levels. Last year’s $1.9 trillion Covid relief package also increased and expanded premium tax credits for Affordable Care Act insurance. As a result, signups rose to a record 14.5 million in 2022 and premium payments halved for millions of enrollees.

Such generosity can’t go on forever, but the deadlines for both programs are hazy. Although President Joe Biden’s administration hasn’t officially announced an extension of the emergency beyond July, state officials are expecting it to last until at least October. The enhanced premium subsidies will expire by year-end, though insurers are already submitting their 2023 plans to state regulators. The uncertainty is hardly helping matters.

Whenever the health emergency ends, states will need to restart eligibility assessments for more than 80 million Medicaid beneficiaries. The Kaiser Family Foundation estimates that 5.3 million to 14.2 million people could lose coverage in the process. Some will no longer qualify because of changes in status, such as rising incomes. But even those still eligible could become uninsured because of administrative errors, as overwhelmed or undertrained staff rush to complete redeterminations before enhanced federal matching runs out. Poor record-keeping and rickety IT systems have also impeded outreach efforts. The sheer number of people who moved during the pandemic left piles of unopened letters, Medicaid’s primary method of communication.

Those no longer eligible for Medicaid could seek marketplace coverage. But many will fail to sign up because the process is simply too confusing or the new costs too high. The Urban Institute estimates that the expiration of enhanced tax credits could add hundreds of dollars to annual premium payments for the lowest earners and leave 3.1 million uninsured.

To minimize the number of people who lose coverage, state and federal officials will need to work cooperatively and methodically.

First, Congress should revive legislation that sets a fixed date for states to begin processing disenrollments. The shifting end of the public-health emergency has made it difficult for states to prepare. Lawmakers also should authorize the federal government to phase down its extra Medicaid payments, which would encourage states to reassess their rosters slowly, while ultimately lowering federal spending. Finally, states that have not adopted the Affordable Care Act provision that expands Medicaid coverage should do so. Without action, more than 2 million people fall into a coverage gap: too poor to qualify for premium tax credits, but with incomes above their states’ exceedingly low Medicaid eligibility thresholds.

Lawmakers can rarely resist too much of a good thing. But with the Covid crisis ebbing, the country needs to start getting back to normal. Ending these emergency programs — while easing the transition — is the right thing to do.

More From Other Writers at Bloomberg Opinion:

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Focus the Abortion-Rights Fight on the Vulnerable: Rhonda Vonshay Sharpe

Fuzzy Language Sets Back the Fight Against Covid: Faye Flam

The Editors are members of the Bloomberg Opinion editorial board.

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