A state-by-state look at the impact of Medicaid determinations

By Nona Tepper and Tim Broderick / March 15, 2023

Medicaid enrollees and the health insurance companies that cover them face major disruptions in the coming months as states resume removing people who no longer qualify from the program.

Medicaid redeterminations have been on pause for more than two-and-a-half years to enable people to remain covered during the COVID-19 pandemic. The federal government offered states extra financial support for Medicaid on the condition that they not remove people from the rolls even if their incomes rose above eligibility standards. With President Joe Biden's announcement that he would allow the federal public health emergency to lapse on May 11, states are free to resume redeterminations as soon as April 1.

For Medicaid insurers, the looming loss of coverage threatens a financial shock.

An estimated 15 million of the 91 million people with Medicaid—or 16.5%—are expected to lose benefits once states begin scrutinizing enrollment, according to the Health and Human Services Department. About a third of those will turn to the health insurance exchange marketplaces for alternative coverage, and 65% of adults will qualify for job-based health insurance, according to the Urban Institute.

These figures help explain why the health insurance industry group AHIP, the Federation of American Hospitals and other healthcare organizations have partnered to provide assistance and resources to people who will have to switch from Medicaid to another form of health coverage.

Among insurers, Molina Healthcare faces the greatest financial risk because it is the least diversified, said Duane Wright, a senior research analyst at Bloomberg Intelligence. Nearly 78% of the company’s $31.97 billion in revenue last year came from Medicaid.