1、1EXECUTIVE INSIGHTSPHE Unwinding Impact on Medicaid Redeterminations In January 2020,the Department of Health and Human Services(HHS)issued a public health emergency(PHE)soon after the first cases of COVID-19 were detected in the U.S.In March 2020,Congress passed the Families First Coronavirus Respo

2、nse Act(FFCRA),which,among other provisions,put in place controls to ensure those in need had access to care during the pandemic.These provisions included:1 A temporary increase of 6.2 percentage points in the Federal Medical Assistance Percentage(FMAP)the federal governments share of Medicaid costs

3、 to qualifying states A maintenance of effort(MOE)protection,also known as“continuous coverage,”which prevents states that receive the increased FMAP from terminating peoples Medicaid coverage during the PHEThe PHE was renewed 12 times in 90-day increments,keeping in place the increased FMAP and MOE

4、 protections for Medicaid,before President Joe Biden announced its end date of May 11,2023.During this same time,estimated enrollment in Medicaid and the Childrens Health Insurance Program(CHIP)approached 92 million as of November 2022,an increase of over 21 million since February 2020;2 however,on

5、Dec.29,2022,President Biden signed the Consolidated Appropriations Act of 2023.This Act allows eligibility terminations to begin on April 1,2023,permitting states to begin initiating renewals that may result in eligibility terminations as early as Feb.1,2023,or at the latest by April 2023,giving eac

6、h state 12 months from its starting point to initiate all renewals,and 14 months from its start to complete all renewals.3 Additionally,the act granted a gradual phaseout of the 6.2 percentage point FMAP enhancement beginning in April 2023 and ending on Dec.31,2023.4 2 L.E.K.ConsultingEXECUTIVE INSI

7、GHTSPHE Unwinding Impact on Medicaid Redeterminations Now the healthcare system is preparing for the far-reaching ramifications that redeterminations will bring.In this Executive Insights,L.E.K.Consulting discusses the implications of upcoming Medicaid redeterminations and considerations for payers,

8、providers and patients.By the numbers:What Medicaid redeterminations could look likeThere are three main variables defining what the impact of Medicaid redeterminations will be:1.The number of people who will lose Medicaid coverage2.How the disenrollments will be distributed over time3.What type of

9、insurance those who lose their Medicaid coverage will receiveThese variables are very difficult to predict,but key indicators such as employment rates,pre-pandemic insurance coverage trends,Affordable Care Act(ACA)policies and state-published plans help shed light on a possible range of outcomes.1.T

10、he number of people who will lose Medicaid coverageFollowing the pandemic,unemployment rates have largely stabilized,indicating a return to long-term pre-pandemic trends,and Medicaid enrollment levels are expected to follow suit.A range of key reports,namely from the Urban Institute and HHS,suggest

11、a consensus of around 15 million total Medicaid/CHIP disenrollments due to Medicaid redeterminations,with some caveats(see Figure 1).5,6 Figure 1Estimate of Medicaid/CHIP enrollment based on redeterminations(November 2022-May 2024P)*Medicaid.gov estimates 91.8 million Medicaid/CHIP enrolled lives as

12、 of November 2022 reported enrollment data;it is expected that this number will increase by April 1,2023*HHS includes the elderly population in estimates and projections,while the Urban Institute appears to only include the non-elderly populationThe Urban Institute expects a total of 18 million peop

13、le will lose Medicaid coverage,3 million will transition from Medicaid to CHIP,resulting in 15 million Medicaid/CHIP individuals to be disenrolled;HHS estimate of disenrollments is outdated,as it is projected from total enrollment at the end of December 2021,is based on 2015-16 SIPP data,and project

14、s disenrollments occurring over the course of 12 months throughout 2022.Note:CHIP=Childrens Health Insurance Program;HHS=Department of Health and Human Services;SIPP=Survey of Income and Program ParticipationSource:Data.Medicaid.gov,“State Medicaid and CHIP Applications,Eligibility Determinations,an

15、d Enrollment Data”;Urban Institute,“The Impact of the COVID-19 Public Health Emergency Expiration on All Types of Health Coverage,”December 2022;U.S.Department of Health and Human Services,“Unwinding the Medicaid Continuous Enrollment Provision:Projected Enrollment Effects and Policy Approaches,”Aug

16、ust 2022;L.E.K.research and analysisCurrent enrollmentin Medicaid/CHIPExpected disenrollmentof Medicaid/CHIPindividuals fromredeterminations*Millions of individualsProjected enrollmentin Medicaid/CHIPpost-redeterminations0506070809092-95M77-80M15M3 L.E.K.ConsultingEXECUTIVE INSIGHTSPHE Un

17、winding Impact on Medicaid Redeterminations Medicaid members losing coverage can be separated into two major groups:those who are no longer eligible and those who lose coverage due to administrative“churn.”Those deemed ineligible will include both enrollees who have gained employer-sponsored insuran

18、ce(ESI)or other insurance while maintaining their Medicaid coverage and those whose only form of insurance is Medicaid but who no longer meet the qualification thresholds.Those who lose coverage due to administrative churn likely still qualify for Medicaid but have not completed timely paperwork nee

19、ded to reassess their eligibility.There could be a variety of reasons for this,such as outdated contact information,lack of education/awareness or inability to handle the burden of paperwork.The two key reports differ in their perspectives on churn and how they account for it within the roughly 15 m

20、illion estimated disenrollments:HHS includes approximately 6.8 million individuals disenrolled due to churn within its 15 million estimate.The Urban Institute estimates its results net of any churn.2.How the disenrollments will be distributed over timeOver 40 states have published plans in varying d

21、etail as to how they will approach redeterminations and over what time frame.They fall into several different categories,as defined by the Centers for Medicare&Medicaid Services(CMS)(see Figure 2 for examples):7 Time-based approach:Distribute renewals based on month or on amount of time since enroll

22、ees application or prior renewal.This would tend to result in a more linear processing of disenrollments.Population-based approach:Prioritize the redeterminations most likely to result in disenrollment.This would result in the front-loading of disenrollments.Hybrid approach:Conduct specific renewals

23、(for those with likely ineligibility)first,then apply a time-based approach for all others.This could result in a still-front-loaded but less steep curve of disenrollments.Other:Take an approach not specifically meeting one of the three CMS definitions listed above(e.g.,a state-designed approach).Ad

24、ditional factors that will influence the distribution of disenrollments over the 14-month period are as follows:States may choose to begin processing renewals in February,March or April 2023.There is a lag between beginning processing and a disenrollment,meaning that while April is the first possibl

25、e month for disenrollments,many states will have their first disenrollments in May or June.4 L.E.K.ConsultingEXECUTIVE INSIGHTSPHE Unwinding Impact on Medicaid Redeterminations CMS recommends that states initiate no more than one-ninth of their renewals in any given month,to better balance the workl

26、oad and lead to fewer inappropriate disenrollments.States will have to report their expected distribution of renewals to CMS.8Given the situations complexity,the mix of state redetermination approaches and the workforce constraints,we expect the likely distribution of disenrollments to be:Somewhat l

27、ower in the first two months(April and May 2023),mainly coming from states that initiated renewals in February or March 2023 Relatively linear to slightly front-loaded in the middle 10 months(June 2023 through March 2024),since the time-based approach is more common,and states using hybrid or popula

28、tion-based approaches will be strongly encouraged to abide by the one-ninth maximum recommendation Somewhat lower in the final two months(April and May 2024),as all states that initiated renewals in February or March 2023 will have completed all renewals by this time3.What type of insurance those wh

29、o lose their Medicaid coverage will receiveIn addition to the difficulty of predicting how many Medicaid/CHIP members will be disenrolled during redeterminations,it is even more challenging to determine what portion of those individuals will remain covered under Medicaid,move to alternate sources of

30、 coverage or become Figure 2Medicaid redetermination approaches of select states*Based on state plans and information available as of February 2023;although a state follows a time-based redetermination approach,there may be some select populations that are prioritized or deprioritized outside the ti

31、me-based schedule.Source:Individual state plans,as found in Georgetown University Center for Children and Families 50-State Unwinding TrackerNONEXHAUSTIVEState-designedPopulation-basedHybridTime-basedMENYMIGAALTXMAAZNVCOMNCA5 L.E.K.ConsultingEXECUTIVE INSIGHTSPHE Unwinding Impact on Medicaid Redeter

32、minations Urban InstituteHHS3Uninsured,includingACA-eligibleunenrolledOther*Nongroup,mainly ACAmarketplacewith PTCsESIOther*ESIUninsuredExchanges/ACAMedicaidCommercial(including ESI)Eligible for low-or no-cost subsidized ACA plan(whether or not enrolled)Uninsured:ESI-eligibleunenrolled andcoverage g

33、ap*Administrativechurn(disenrollment from Medicaid while still eligible)Percentage of Medicaid/CHIP disenrolled livesPercentage of new Medicaid membershipacquired during the PHE MOEElevance Health Q2 20220506070809005060708090642673545uninsured altogether.Academic,go

34、vernment and corporate institutions have presented a wide range of estimates(see Figure 3),but these sources share some similar overarching themes.The Urban Institute,HHS and Elevance Health all expect the majority of disenrolled individuals either already have moved or will move to commercial(mainl

35、y ESI)coverage,as national unemployment a driver of Medicaid enrollment has returned to pre-pandemic levels.Following transitions to commercial coverage,sources expect ACA marketplace plans to act as another lever to reduce the magnitude of uninsured individuals nationally.Where sources differ,howev

36、er,is in how they expect the remainder of disenrolled members to churn and presumably reenroll in Medicaid versus move to alternate coverage or remain uninsured.Sources are also discrepant as to how many disenrolled individuals will become uninsured;the Urban Institute says there could be approximat

37、ely 3.8 million uninsured individuals following the redeterminations.Figure 3Projections of disenrolled Medicaid/CHIP individuals,by insurance status,by source*Urban Institutes“Other”category includes other public or non-ACA-compliant coverage*HHS“Other”category refers to those who“Changed to Non-Ma

38、rketplace Coverage that Precludes Advanced Premium Tax Credits”*HHS“Coverage gap”category refers to the Medicaid coverage gap in Medicaid nonexpansion states This represents eligible individuals,whereas the ESI and Other categories represent projected enrollment;not all who are eligible would enroll

39、 in the ACA plansThe period over which a“churn”individual would be placed back onto Medicaid coverage is not specified by HHS Specifically referring to nonelderly individuals In the Q2 2022 earnings call,Elevance Health stated,“Over the past year,weve added more than 2.7 million net new members,incl

40、uding over 1.5 million net new government members and nearly 1.2 million net new commercial members.”Note:CHIP=Childrens Health Insurance Program;ACA=Affordable Care Act;PTCs=premium tax credits;ESI=employer-sponsored insurance;PHE=public health emergency;MOE=maintenance of effort;HHS=Department of

41、Health and Human Services Source:Urban Institute,“The Impact of the COVID-19 Public Health Emergency Expiration on All Types of Health Coverage,”December 2022;U.S.Department of Health and Human Services,“Unwinding the Medicaid Continuous Enrollment Provision:Projected Enrollment Effects and Policy A

42、pproaches,”August 2022;Elevance Health Q2 2022 earnings call transcript and Form 10-Q 6 L.E.K.ConsultingEXECUTIVE INSIGHTSPHE Unwinding Impact on Medicaid Redeterminations Implications across the healthcare ecosystem The impact of Medicaid redeterminations will be felt across the healthcare ecosyste

43、m from managed care organizations(MCOs)to providers and patients.Medicaid redeterminations will benefit some participants in the healthcare value chain more than others(see Figure 4):Patients:Redeterminations will not impact all disenrolled members negatively;many have transitioned to ESI coverage w

44、hile regaining employment and are utilizing more comprehensive care benefits.However,millions are still at risk of losing insurance.Providers:Some may experience the net benefit of higher reimbursement rates for patients who transitioned from Medicaid to ESI or ACA.Others who serve communities with

45、higher unemployment and/or poverty may be adversely impacted if more of their patients experience churn or uninsurance.Health plans:MCOs with a high proportion of Medicaid members will face headwinds as ineligible members are disenrolled and associated premiums disappear.Those with a focus on commer

46、cial and other government service lines will benefit from shifts to ESI and ACA exchange plans.Figure 4Shifts in the value chain across healthcare stakeholders as a result of Medicaid redeterminationsNote:ESI=employer-sponsored insurance;ACA=Affordable Care Act;MCO=managed care organization Source:L

47、.E.K.research and analysisFollowing Medicaid redeterminations,the five largest Medicaid MCOs all have significant revenue losses at stake.Centene and Molina are at greatest risk,as Medicaid is the largest business segment for both companies.Centene expects around$9 billion in run-rate revenue giveba

48、ck after redeterminations resume.9 Molina anticipates the potential loss of 300,000 or more Medicaid members when redeterminations commence.10 This presents these plans with Patients with more comprehensive coverage benefits(e.g.,ESI,ACA)+Providers receiving higher reimbursement rates as patients mo

49、ve to ESI and ACA+MCOs with business focus on commercial and/or ACA service lines+States offloading premium payments from budget+Patients who become uninsured-Providers whose patients experience churn or uninsurance-MCOs with business focus on Medicaid service line-Employer groups with new influx of

50、 individuals to pay for-7 L.E.K.ConsultingEXECUTIVE INSIGHTSPHE Unwinding Impact on Medicaid Redeterminations a large incentive to act in the short term and utilize these opportunities for the long term as well.Thus,MCOs should:11,12 Proactively assist state Medicaid agencies in all ways possible.Th

51、is will allow MCOs to gather beneficiary renewal information that will help individuals avoid disenrollment and/or help those who are ineligible transition to ACA marketplace coverage.Maximize retention of eligible members to reduce churn and preserve continuity of benefits.Expand their geographic p

52、resence in ACA marketplace offerings,beginning in states where the MCO has Medicaid presence.Diversify their ACA exchange product offerings by designing more plans with various price points and choices of benefits to attract more consumers,especially those who have been disenrolled.Centene,for examp

53、le introduced new marketplace product designs in 2022.13The nations largest health plans could offset potential losses,or even create new revenue streams,by channeling their integration of Medicaid Managed Care and exchanges within states.HHS recently reported a record-high 16.3 million people selec

54、ting ACA marketplace plans during the 2022-23 open enrollment period,including 3.6 million new-to-marketplace enrollees,up 21%relative to the prior year.14 This achievement signals the promise of greater public awareness of and access to marketplace coverage.Given the Inflation Reduction Act extensi

55、on of premium subsidies(i.e.,premium tax credits)until 2025,MCOs have supporting incentives to persuade beneficiaries to transition.However,MCOs will have to overcome their greatest and most well-known barriers,as follows:15,16,17 Gaining timely information from state agencies to target ineligible M

56、edicaid individuals to share with marketplace colleagues Building awareness among current Medicaid beneficiaries of the upcoming redetermination process and of alternate coverage options and,when within state regulations,assisting members with completing the redetermination process Informing disenro

57、lled individuals of how,when and where to enroll in other coverage options,such as CMS temporary special enrollment period for disenrolled individuals to enroll in ACA marketplace coverage from March 31,2023,through July 31,202418 Maintaining compliance with complex Federal Communications Commission

58、 regulations regarding outreach to members8 L.E.K.ConsultingEXECUTIVE INSIGHTSPHE Unwinding Impact on Medicaid Redeterminations Health plans will have to continue prompting and collaborating with states as best they can to bridge the coverage transition gap that could otherwise lead to losses in bot

59、h dollars and insured members.ConclusionIn Q1 2022,the national uninsured rate reached an all-time low of 8%.19 Now,2023 will be a pivotal year in preserving health insurance coverage for as many individuals as possible,even as Medicaid redeterminations begin in the spring.L.E.K.s Healthcare Service

60、s practice continues to perform work across this space to help clients navigate uncertainties.With our knowledge and expertise,we can help develop strategic solutions that fit your needs for commercial excellence but also for growth in the years ahead.For more information,please contact .Endnotes1U.

61、S.Congress,“Public Law 116-127 Mar.18,2020:Families First Coronavirus Response Act.”https:/www.congress.gov/116/plaws/publ127/PLAW-116publ127.pdf 2Centers for Medicare&Medicaid Services,“November 2022 Medicaid and CHIP Enrollment Trends Snapshot.”https:/www.medicaid.gov/medicaid/national-medicaid-ch

62、ip-program-information/downloads/november-2022-medicaid-chip-enrollment-trend-snapshot.pdf 3Centers for Medicare&Medicaid Services,“SHO#23-002 RE:Medicaid Continuous Enrollment Condition Changes,Conditions for Receiving the FFCRA Temporary FMAP Increase,Reporting Requirements,and Enforcement Provisi

63、ons in the Consolidations Appropriations Act,2023.”https:/www.medicaid.gov/federal-policy-guidance/downloads/sho23002.pdf 4U.S.Congress,“H.R.2617 Enrolled Bill:Consolidated Appropriations Act,2023.”https:/www.congress.gov/bill/117th-congress/house-bill/2617/text 5U.S.Department of Health and Human S

64、ervices,“Unwinding the Medicaid Continuous Enrollment Provision:Projected Enrollment Effects and Policy Approaches.”https:/aspe.hhs.gov/sites/default/files/documents/404a7572048090ec1259d216f3fd617e/aspe-end-mcaid-continuous-coverage_IB.pdf 6Urban Institute,“The Impact of the COVID-19 Public Health

65、Emergency Expiration on All Types of Health Coverage.”https:/www.urban.org/research/publication/impact-covid-19-public-health-emergency-expiration-all-types-health-coverage 7Centers for Medicare&Medicaid Services,“Medicaid and CHIP Unwinding Planning Efforts:Summary of Best&Promising State Practices

66、 from CMS/State Discussions,April 2022.”https:/www.medicaid.gov/resources-for-states/downloads/state-unwinding-best-practices.pdf 8Centers for Medicare&Medicaid Services,“SHO#23-002 RE:Medicaid Continuous Enrollment Condition Changes,Conditions for Receiving the FFCRA Temporary FMAP Increase,Reporti

67、ng Requirements,and Enforcement Provisions in the Consolidated Appropriations Act,2023.”https:/www.medicaid.gov/federal-policy-guidance/downloads/sho23002.pdf 9Centene Corp.,“Centene Corporation Q4 Earnings Call.”https:/ 10Molina Healthcare,“Q4 2022 Molina Healthcare,Inc.Earnings Conference Call.”ht

68、tps:/ 11Beckers Payer Issues,“Payers prep for the great 2023 shuffle from Medicaid to ACA coverage.”https:/ 12Kaiser Family Foundation,“Medicaid Managed Care Plans Can Help Enrollees Maintain Coverage as the Public Health Emergency Unwinds.”https:/www.kff.org/medicaid/issue-brief/medicaid-managed-ca

69、re-plans-can-help-enrollees-maintain-coverage-as-the-public-health-emergency-unwinds/#13Centene Corp.,“2021 Annual Review.”https:/ 14U.S.Department of Health and Human Services,“Biden-Harris Administration Announces Record-Breaking 16.3 Million People Signed Up for Health Care Coverage in ACA Market

70、places During 2022-2023 Open Enrollment Season.”https:/www.hhs.gov/about/news/2023/01/25/biden-harris-administration-announces-record-breaking-16-3-million-people-signed-up-health-care-coverage-aca-marketplaces-during-2022-2023-open-enrollment-season.html 9 L.E.K.ConsultingEXECUTIVE INSIGHTSPHE Unwi

71、nding Impact on Medicaid Redeterminations 15Beckers Payer Issues,“Payers prep for the great 2023 shuffle from Medicaid to ACA coverage.”https:/ 16Urban Institute,“Preparing for the Biggest Coverage Event since the Affordable Care Act.Perspectives from State Officials on the End of Medicaids Continuo

72、us Coverage Requirement.”https:/www.urban.org/sites/default/files/2022-03/preparing-for-the-biggest-coverage-event-since-the-affordable-care-act_0_0.pdf 17Bright Spots in Healthcare(webinar),“2023 Strategy Session:Member Redetermination,CAHPS,and Social Needs.”https:/ of Health and Human Services,“T

73、emporary Special Enrollment Period(SEP)for Consumers Losing Medicaid or the Childrens Health Insurance Program(CHIP)Coverage Due to Unwinding of the Medicaid Continuous Enrollment Condition Frequently Asked Questions(FAQ).”https:/www.cms.gov/technical-assistance-resources/temp-sep-unwinding-faq.pdf

74、19U.S.Department of Health and Human Services,“National Uninsured Rate Reaches All-Time Low in Early 2022.”https:/aspe.hhs.gov/reports/2022-uninsurance-at-all-time-low10 L.E.K.ConsultingEXECUTIVE INSIGHTSPHE Unwinding Impact on Medicaid Redeterminations Matt SabbatinoMatt Sabbatino is a Managing Dir

75、ector in L.E.K.Consultings New York office.Matt is a member of the Healthcare Services practice and specializes in payer/provider integration and behavioral health.Prior to joining L.E.K.in 2011,Matt served as a Captain,combat engineer and paratrooper in the United States Army.He holds a Bachelor of

76、 Science in systems engineering from the University of Pennsylvania and a Master of Business Administration from Carnegie Mellon University.Brendan MitchellBrendan Mitchell is a Managing Director and Partner in L.E.K.Consultings Healthcare Services practice and is based in the firms San Francisco of

77、fice.Brendan focuses on growth strategy,M&A and operations-related topics and has used his experience to serve leading national and regional payers,risk-bearing provider organizations,healthcare IT firms,and private equity investors.His core areas of expertise include care model design,clinical oper

78、ations and healthcare payments.Andrew GaribaldiAndrew Garibaldi is a Managing Director and Partner in L.E.K.Consultings Boston office.Andrew co-leads the healthcare services subsector and has worked extensively on payer and provider strategy,complex populations and government programs,care model des

79、ign,post-acute care,and transaction support engagements.He is experienced with growth strategy development,market analysis,financial modeling and data analytics.Jenny MackeyJenny Mackey is a Principal in L.E.K.s Life Sciences practice and the Director of L.E.K.s Healthcare Insights Center.In her rol

80、e as a Principal,Jenny focuses on the biopharmaceutical sector and advises clients on a range of issues including R&D portfolio prioritization,new product planning,forecasting and valuation,and organizational performance and development.In the Healthcare Insights Center,she is focused on generating

81、insights and thought leadership on topics and trends with major impact across the healthcare industry.Nilanjana RayNilanjana Ray is a Senior Associate Consultant in L.E.K.Consultings Chicago office and is dedicated to the Healthcare Services practice.Nila graduated from the University of Chicago wit

82、h a B.A.in Biological Sciences and in Psychology.She has extensive experience in the payer and provider space and has worked across a number of strategy,implementation and M&A projects.About the Authors11 L.E.K.ConsultingEXECUTIVE INSIGHTSPHE Unwinding Impact on Medicaid Redeterminations About L.E.K

83、.ConsultingWere L.E.K.Consulting,a global strategy consultancy working with business leaders to seize competitive advantage and amplify growth.Our insights are catalysts that reshape the trajectory of our clients businesses,uncovering opportunities and empowering them to master their moments of trut

84、h.Since 1983,our worldwide practice spanning the Americas,Asia-Pacific and Europe has guided leaders across all industries from global corporations to emerging entrepreneurial businesses and private equity investors.Looking for more?Visit .L.E.K.Consulting is a registered trademark of L.E.K.Consulting LLC.All other products and brands mentioned in this document are properties of their respective owners.2023 L.E.K.Consulting LLC