The Great Unwinding: Winding Up for Poor Health Outcomes?
In 1965, Medicaid was signed into law by President Lyndon B. Johnson as part of the Social Security Amendments and was authorized by Title XIX of the Social Security Act, which provided matching funds from the federal government to states to help them provide medical assistance to eligible residents. It plays a critical role in providing coverage and access to care for vulnerable populations such as low-income, minorities, seniors and the disabled. As of May 2024, 41 states plus Washington DC have adopted the Affordable Care Act (ACA) Medicaid expansion, which was made optional for states due to a 2012 Supreme Court ruling. The decision not to expand Medicaid eligibility exacerbated geographic disparities in health coverage, access, and outcomes, and continues to amplify the economic and health impact of COVID-19 through the unwinding of the Medicaid continuous enrollment provision implemented during the COVID-19 public health emergency (Pilllai et al., 2019). Due to the impact of COVID-19 on jobs, income, and health insurance, more people enrolled in Medicaid. This was partly because Congress provided extra funding to states in exchange for them continuing to allow people to enroll and receive Medicaid throughout the public health emergency. Additionally, several states made it easier for people to qualify for and enroll in Medicaid to ensure they had access to healthcare coverage. Consequently, over 5.3 million additional Americans had Medicaid coverage in 2020.
Despite Medicaid enrollment growing from 71.1 million in February 2020 to more than 94 million people in May 2023, a reversal of this expansion called “The Great Unwinding” began in April 2023 after the end of the COVID-19 public health emergency (Haeder & Moynihan, 2024). At this time, the states began to review eligibility for their enrollees and disenrolling those who no longer qualified or did not complete the renewal process. Between April 2023 and June 2024, 23.8 million lost Medicaid coverage and 52 million had coverage renewed. There are wide variations in disenrollment rates ranging from above 50% in states such as Utah and Oklahoma, and 10% in Maine and Wyoming. Seven in 10 disenrollments were for procedural reasons (failure to complete renewal process and state not verifying if no longer eligible). States were prohibited from ending Medicaid coverage for most enrollees since March 2020 under what is known as the continuous coverage requirement. That requirement officially ended on March 31, 2023, which means states had to “unwind” by resuming normal Medicaid operations and conducting eligibility redeterminations for all enrollees. States were authorized to end coverage as soon as April 1, 2023, for those found ineligible. Of those who were disenrolled, according to the Kaiser Family Foundation 42 percent of those disenrolled eventually re-enrolled in Medicaid/CHIP within a year, 26 percent had another source of coverage for that full year, 17 percent were uninsured for the full year, and 16 percent were a mix of uninsurance and another source of coverage for that year.
States were allowed significant discretion in managing the unwinding, which might have been influenced by federal incentives, prior preparation, and administrative capacity, but also policy maker and public preferences. States have varied significantly in their discretion and choices, with many failing to use evidence-based policy tools that could have minimized the negative effects on beneficiaries. Although there are not yet many studies that have examined the effects of the Great Unwinding on health outcomes, there is evidence from prior studies on the health outcomes of disenrolled beneficiaries. For example, a 2017 study by Tarazi et al. on the impact of Medicaid disenrollment in Tennessee on breast cancer stage at diagnosis and treatment found that Medicaid disenrollment is associated with the later stage of disease at the time of the diagnosis, which also increases the cost of care. In 2005, Tennessee’s financially beleaguered Medicaid program terminated coverage for nonelderly adults who failed to meet traditional requirements for coverage for nearly 170,000 enrollees, or approximately 4% of the state’s nonelderly adults. This action left these patients without coverage that enables access to health care services, including breast cancer screening and treatment. Many studies have shown that health insurance coverage is associated with earlier diagnosis and improved health outcomes in women diagnosed with breast cancer. Many studies have also found that Medicaid disenrollment in different states found that termination of coverage was high among vulnerable populations, and that loss of coverage increased the use of emergency departments and discontinuity of care. A 2023 multimodal survey study of 2210 adults by McIntyre et al. (2024) on outcomes, which is the only study published thus far since the unwinding, found that losing Medicaid coverage was significantly associated with delaying care due to cost and worsening affordability. For example, this study found that the sample population experienced more cost-related care delays, skipped medications due to cost and was less likely to have had a checkup.
Furthermore, a 2023 study conducted by Moriya and Chakravarty found that Medicaid expansions decreased disparities in preventable hospitalizations and ED visits between non-Hispanic Black and White nonelderly adults by 10 percent or more. Soni et al.’s 2020 meta-analysis of 43 studies found evidence of improvements in health status, chronic disease, maternal and neonatal health, and mortality, with some findings corroborated by multiple studies. Some studies further suggested that the beneficial effects have grown over time and thus may continue to grow if the ACA insurance expansions remain in force. However, Soni et al. noted the significant challenges facing researchers who study post-expansion health outcomes, including the importance of nonmedical factors, such as social determinants of health (SDOH) in determining individual health status. Even so, it follows that if expanding Medicaid decreases health disparities and improves care outcomes, then contracting it through disenrollment increases disparities and worsens care outcomes.
Perhaps the most egregious example of the negative effects of Medicaid disenrollment during the unwinding can be found in a recently decided Tennessee court case, A.M.C. et al v. Smith, U.S. District Court for the Middle District of Tennessee. The 116-page case brief is full of examples of Tennesseans whose health outcomes were negatively affected by improper disenrollment from TennCare, the state-administered Medicaid program. Designed and built by Deloitte in 2012 and deployed in 2019, TennCare’s systems have had notable issues with eligibility algorithm and design defects described in detail in the case brief. “Poor, disabled, and otherwise disadvantaged Tennesseans should not require luck, perseverance, or zealous lawyering to receive healthcare benefits they are entitled to under the law,” stated the court opinion. Although this litigation was brought on by TennCare’s system deficiencies that caused improper Medicaid disenrollments, it serves as a cautionary tale of the consequences of disenrollment regardless of the reason. Tennessee also happens to be a state that did not expand Medicaid, so it is that much harder for the state’s poor, disabled and disadvantaged to achieve health and wellness.
If you want to help prevent the need for luck, perseverance, or zealous lawyering for members to receive the benefits to which they are entitled, Centauri can help.
Dawn Carter
Director, Product Strategy
Centauri Health Solutions, Inc.