Without Build Back Better, Will the End of the Public Health Emergency Leave Even More People Uninsured?

With the COVID-19 pandemic came millions of job losses. But, for the first time in an economic downturn, the Affordable Care Act (ACA) was in place as a safety net, including expanded Medicaid eligibility in the 38 states and the District of Columbia that have opted for it, plus premium assistance in the ACA’s insurance Marketplaces.

Building on ACA coverage options, Congress acted earlier in the pandemic to provide continuous coverage for Medicaid enrollees in exchange for enhanced federal matching funds and to temporarily increase ACA Marketplace subsidies. To prevent Medicaid coverage losses during the COVID-19 pandemic, the Families First Coronavirus Response Act (FFCRA) of 2020 increased the federal share of most Medicaid spending on the condition that states meet certain maintenance of eligibility (MOE) requirements, including pausing Medicaid disenrollment. Additionally, the American Rescue Plan Act (ARPA) of 2021 expanded and enhanced ACA Marketplace subsidies by lowering the monthly premium enrollees are expected to pay and by extending subsidies to middle-income people who were previously ineligible for help but often priced out of the market. Of particular note, the ARPA guarantees the lowest income Marketplace enrollees have access to zero (or near-zero) dollar premium plans with very low deductibles.

Both the Medicaid MOE and the ARPA’s enhanced Marketplace subsidies are temporary and could end this year, potentially resulting in coverage loss. The Medicaid MOE is tied to the Public Health Emergency (PHE) and the ARPA’s enhanced Marketplace subsidies are currently set to expire at the end of 2022. The PHE has been extended to mid-April, but the Biden Administration has indicated that states will have 60 days’ notice before it ends, so it is expected the PHE will be extended again.  When the PHE expires, states will be able to start Medicaid dis-enrollments at the beginning of the following month and that could put millions of people at risk for losing Medicaid coverage. Medicaid enrollment has increased by over 12 million since the beginning of the pandemic. Similarly, if the ARPA’s enhanced subsidies are allowed to expire at the end of this year, the original ACA subsidies will remain in place, but millions of people could see their premium payments rise steeply, which could also lead to coverage loss. During the recent ACA open enrollment period, signups increased to 14.5 million, the highest level ever, likely due to the increased premium assistance, a longer and broader enrollment period, and stepped up outreach.

Enhanced Marketplace subsidies could act as a bridge between Medicaid and the ACA Marketplaces when the public health emergency ends. Some people who lose Medicaid coverage after the MOE ends may be eligible for employer coverage, others may still be eligible for Medicaid but could nonetheless lose coverage if they aren’t able to navigate the redetermination process, and still others will be eligible for Marketplace subsidies. If enhanced Marketplace subsidies are still in place when the Medicaid MOE ends, many people disenrolled from Medicaid could find similarly low-cost coverage on the ACA Marketplaces. If they are eligible for Marketplace subsidies, people losing Medicaid coverage may find Marketplace plans that, like Medicaid, have zero (or near-zero) monthly premium requirement and require very low out-of-pocket costs.

The Build Back Better Act (BBBA) would have continued enhanced Marketplace subsidies, but negotiations on the Hill have stalled. BBBA, as passed by the House, includes provisions that de-link the continuous enrollment and enhanced federal Medicaid payments from the PHE and set a date-certain to phase out those provisions. The BBBA also included rules to help those who remain eligible for Medicaid retain coverage. BBBA would also extend the ARPA’s enhanced Marketplace subsidies through 2025 and use Marketplace subsidies to close the Medicaid coverage gap in states that have not expanded Medicaid. However, while the BBBA has passed the House, it faces uncertain prospects in the Senate with negotiations stalled. The ACA and Medicaid provisions have not been controversial among Democratic Members of Congress, but it remains unclear if there will be a legislative vehicle to finance and enact them.

If enhanced Marketplace subsidies expire at the end of this year, low-income enrollees could still access ACA subsidies, but their transition from Medicaid as the public health emergency ends would be much more expensive. With the enhanced subsidies, a low-income person with an income of 1.5 times the poverty level ($19,320 for a single person) could get an ACA benchmark silver plan for a premium of zero or near zero and low deductibles and copays. Once the enhanced subsidies expire at the end of 2022, though, their premium payment for the benchmark silver plan would jump to over $65 per month. Many low-income people could still get a bronze plan for no premium, but those plans carry deductibles averaging about $7,000.

Continuous enrollment in Medicaid and enhanced premium assistance have helped millions afford and maintain coverage, but those gains could be reversed as the public emergency ends and if the BBBA fails to pass. The end of the public health emergency and, with it, the requirement for continuous enrollment in Medicaid will no doubt lead to coverage losses that could vary significantly across states depending on state policies as well as outreach. While many Medicaid enrollees may still be eligible, they could get caught in bureaucratic snags as renewal procedures resume and may need assistance. Provisions in the BBBA to close the Medicaid coverage gap in the dozen states that have not expanded eligibility under the ACA could provide new coverage to over two million people who currently do not have access to affordable coverage. Provisions in BBBA to continue enhanced premium assistance would also ease the transition for those no longer eligible for Medicaid. Without the BBBA, coverage losses could be significantly greater. The number of people uninsured has not grown during the pandemic and resulting economic crisis. But, perhaps ironically, we could see a big jump in the uninsured rate as the public health emergency ends if people who continue to be eligible for Medicaid are not able to retain coverage and legislation like the Build Back Better Act fails to pass.