Public Coverage Is Up, Private Coverage Is Down — Yet Likely Not for Long

by Leslie Small

 

The uninsured rate dipped slightly between 2020 and 2021, and while private insurance continued to be the most common type of coverage, it decreased in prevalence while government coverage increased, according to new data from the U.S. Census Bureau. One Wall Street analyst suggests that the findings are unsurprising given the current policy and demographic landscape, but he notes that trends are poised to change considerably when millions cease to qualify for Medicaid.     Public-sector plan enrollment has ticked up sharply  The Census Bureau’s survey found that 2021, 27.2 million Americans did not have coverage last year, down from 28.3 million the year prior. The 2021 uninsured rate of 8.3% represented a small uptick compared to 2019, however, when it reached a low of 8.0%.   Between 2020 and 2021, the private insurance coverage rate decreased by 0.6 percentage points to 66.0%. Meanwhile government coverage — including Medicare, Medicaid and coverage provided by Dept. of Veterans Affairs — increased by 1.2 percentage points year over year to 35.7%.   “The report’s findings largely sync with private insurance coverage attrition in context of the continued rollover effects of COVID-19 and the general aging of the population,” Citi analyst Jason Cassorla wrote in a Sept. 14 note to investors.  The rate of people with Medicaid increased by 0.9 percentage points between 2020 and 2021, with 18.9% of Americans getting coverage from the program, per the Census Bureau.   Those who lose Medicaid coverage could transition to the exchanges  States have paused Medicaid eligibility redeterminations since the beginning of the COVID-19 public health emergency (PHE) as a condition of receiving enhanced federal funding, pushing enrollment in that program artificially high. When the PHE ends, 17.4% of Medicaid and Children’s Health Insurance Program enrollees will lose coverage, HHS recently estimated.  Meanwhile, a special enrollment period tied to the pandemic and enhanced federal subsidies have led to record-high enrollment in the Affordable Care Act exchanges. That trend could continue in the near future thanks to a few factors: Congress’ extension of the bulked-up subsidies for another three years, increased outreach funding from the Biden administration, and the migration to the exchanges that some people losing Medicaid coverage are expected to make.     “Moving forward, the focus remains on the fallout of Medicaid reverifications that resume at the end of the COVID-19 PHE, which may result in an uptick in the uninsured rate, all else considered,” Cassorla wrote to investors. “That said, with the enhanced ACA subsidies offering those individuals an affordable option for coverage on the Exchanges, the potential uptick in uninsured in aggregate would be at least partially offset from a payor mix perspective by those transitioning from Medicaid coverage to Exchange plans given the relatively favorable reimbursement for Exchange members vs Medicaid enrollees.”

 

From Health Plan Weekly

 

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