Growth in Medicare enrollment slowed in federal fiscal year 2022 and is expected to decline next year as the COVID-19 emergency will likely end, a new state survey found.
However, the survey, released Tuesday by the Kaiser Family Foundation, also showed that almost all the states don’t anticipate any revenue shortfalls or cuts to their budgets despite a looming recession and inflation. States also expect their spending to slow down as a boost to federal matching rates expires next year.
Medicaid enrollment peaked in fiscal 2021, rising by 11.2% that year. However, the survey showed that enrollment growth slowed in 2022 to 8.4%.
“In [fiscal year] 2023, enrollment is projected to decline slightly (-0.4%) due to assumptions related to the duration of the PHE and related [continuous coverage] requirements,” the foundation said.
Total Medicaid spending growth increased at 12.5% in fiscal 2022 and is expected to slow to 4.2% in 2023.
“High enrollment growth rates, tied first to the Great Recession and later to [Affordable Care Act] implementation, were the primary drivers of total Medicaid spending growth over the last decade,” the survey said.
The survey of each state Medicaid director details how states are bracing for the challenges that could come in 2023 from redetermining eligibility in Medicaid.
At the start of the pandemic, the federal government increased the matching rate for Medicaid payments to states, but only if the states agreed to not drop anyone off Medicaid’s enrollment rolls for the duration of the COVID-19 public health emergency.
The PHE currently runs through January, but almost all states surveyed adopted budgets that expect it to end next year. States have 14 months after the PHE ends to finish eligibility redeterminations.
“States will likely face pressure to contain growth in state spending after the enhanced [federal rate] ends,” the survey said. “At the same time, states may need to overcome systems and staffing challenges to ensure eligible individuals remain enrolled or transition to other coverage sources.”
The Centers for Medicare & Medicaid Services has released guidance to states on how to complete the redeterminations.
Some states have told the Medicaid and CHIP Payment and Access Commission that it could take six months to a year to finish redeterminations.
A prior analysis from Kaiser predicted between 5.3 million and 14.2 million enrollees may lose Medicaid coverage next year.