The End of the COVID-19 Public Health Emergency Is Inevitable. Here’s What That Could Mean for Health Plans

By Erin Trompeter, MMIT
Manager, Payer Data

With the continuation of the COVID-19 pandemic and resulting policy changes, the health plan landscape is facing some complex challenges ahead.

A key factor contributing to these challenges is the Public Health Emergency (PHE) that was declared in January 2020 and renewed on July 15. As a condition of receiving enhanced federal funds during the PHE, states have been required to ensure continuous Medicaid and CHIP coverage for most enrollees by pausing eligibility redeterminations—a process in which the state determines if a member is still eligible for coverage due to factors such as income level. 

As a result, many lives are covered and are staying covered under Medicaid, but the PHE—despite its recent extension through Oct. 13, 2022—won’t be in effect forever. To understand the current health plan landscape and how it might be affected by the eventual discontinuation of the PHE, my team and I analyzed the latest enrollment data from AIS’s Directory of Health Plans (DHP). Here are the key findings—and what they could mean for insurers across the U.S. and their members.  

The PHE’s Impact on Current and Future Enrollment

Overall, our data shows a large uptick in Medicaid coverage: Total Medicaid membership increased by approximately 5.5 million lives since the first quarter of 2021, and state Medicaid rose by 431,000 members over the last quarter. California Medicaid plans saw some of the largest increases over last quarter, growing by 338,506 lives in total, a 3% jump. Texas Medicaid HMOs also saw gains, rising over 134,000 since last quarter.

With each renewal of the PHE, states are given another 90 days to keep redetermination efforts on hold. But whenever the PHE does inevitably end, we could see a tidal wave of sign-ups on the public healthcare exchanges, which would add to the increase we saw last year: Our data shows that the exchanges saw an uptick of 2.1 million members for 2022, mainly due to the federal government increasing the subsidy amounts available to exchange members for the 2022 plan year, making premiums more affordable. It’s unclear whether these enhanced subsidies will be available next year, but the Biden administration is currently considering extending them. 

Adding to this unpredictability is the fact that each state is bound to take a different approach to the end of the PHE and the return of redeterminations. 

For example, when the PHE ends, Iowa is planning to instate 12-month redeterminations, allowing the state to identify newly ineligible members and focus on moving those members to other plans, such as the Affordable Care Act marketplace. Iowa’s state Medicaid agencies will follow up with those who have not verified their address and fulfilled their paperwork when the PHE ends. Overall, other states should follow Iowa’s example to help the many people who could find themselves in need of new health coverage. 

Preparing for the Next Normal

Health insurers operating in the public sector could use this time prior to the eventual end of the PHE to help their members prepare for the impending wave of eligibility redeterminations. However, the PHE does not have a guaranteed end date, and Medicaid plans are continuing to gain members. Helping Medicaid recipients prepare for redetermination could be difficult amid enrollment gains and a market that continues to see staffing challenges. 

Moreover, our data shows that health plans are continuing to merge, particularly in the Medicaid space, which may present challenges to current and prospective members as they adapt to new policies and shifts in eligibility. What’s more, it could also mean that health plans that have a longstanding history of consistent membership and little shift in their organizations could weather this storm better than other health plans. 

Despite the recent renewal of the PHE, there is an inevitable end date looming, making it an unpredictable time for U.S. health plans. Insurers need to start planning now and in the months ahead to be able to handle potential dramatic shifts in membership, whether that’s an influx of new members—and the various risk factors and costs that come with them—or a loss of members who no longer meet eligibility requirements. 

To see how MMIT can help you analyze enrollment data and better understand health plan activity, check out our Directory of Health Plans.