A healthcare cliff could leave millions uninsured

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Since early 2020, the US has been in an official public health emergency. In July it should be over after 30 months. An unexpected consequence is that millions of Americans could lose their health insurance.

At the root of the problem is Congress’ extraordinary spending spree to fight the pandemic. As Covid-19 spread and businesses closed, a wave of job losses left millions of Americans without employer-sponsored health insurance. To avert a financial crisis as the newly uninsured flocked to Medicaid, the federal government offered states additional funding as long as it didn’t throw anyone out of the program during the public health emergency.

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

This generosity cannot go on forever, but the deadlines for both programs are blurry. Although President Joe Biden’s administration has not officially announced an extension of the state of emergency beyond July, state officials expect it will last at least through October. The improved premium subsidies expire by the end of the year, although insurers are already filing their plans for 2023 with state regulators. The uncertainty doesn’t help much.

When the public health emergency ends, states will have to restart eligibility checks for more than 80 million Medicaid beneficiaries. The Kaiser Family Foundation estimates that 5.3 million to 14.2 million people could lose insurance coverage as a result. Some qualify based on status changes, such as: B. rising income, no more. But even those who are still eligible could be left uninsured due to administrative errors as overworked or underqualified staff rush to finalize redeterminations before the expanded federal reconciliation expires. Poor record-keeping and rickety IT systems have also hampered public relations efforts. The sheer number of people who have moved during the pandemic has left mountains of unopened letters, Medicaid’s primary method of communication.

Those who are no longer eligible for Medicaid can apply for market coverage. But many will not register because the process is simply too confusing or the new costs are too high. The Urban Institute estimates that the phasing out of enhanced tax credits could add hundreds of dollars to annual premium payments for low earners and leave $3.1 million uninsured.

To minimize the number of people who lose insurance coverage, state and federal officials must work collaboratively and methodically.

First, Congress should reinstate legislation that sets a firm date for states to begin processing exmatriculations. The shifting end of the public health emergency has made it difficult for states to prepare. Lawmakers should also authorize the federal government to phase out its additional Medicaid payments, which would encourage states to slowly reevaluate their rosters while cutting federal spending. Finally, states that have not yet adopted the Affordable Care Act provision expanding Medicaid coverage should do so. Without action, more than 2 million people fall into a coverage gap: they are too poor to qualify for bonus tax credits but with incomes above their state’s extremely low thresholds for Medicaid eligibility.

The legislature can seldom resist too much of a good thing. But as the Covid crisis subsides, the country needs to get back to normal. Ending these contingency programs—while easing the transition—is the right thing to do.

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The editors are members of the Editorial Board of Bloomberg Opinion.

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