During the pandemic, Congress did something unprecedented: it guaranteed continuous health insurance coverage for low-income individuals. Now that pandemic-related policies are ending, this guarantee is also ending, and states are clearing out their Medicaid rolls. But this change isn’t getting enough attention—and that’s because the program is functioning as intended.
Medicaid has been far more generous than ever during the pandemic. The usual process of determining whether a Medicaid enrollee still qualifies for coverage was paused for the past three years. The program has grown by over 20 million enrollees (representing a 30 percent increase), largely due to this temporary change. Normally, if an enrollee is ineligible for coverage or if the state cannot verify eligibility, then the enrollee is disenrolled from the program. As of April 1, the program started to return to this pre-pandemic form.
Estimates suggest that 15–18 million people could lose Medicaid coverage as the program “returns to normal.” Not all of those people are projected to lose coverage entirely—the Urban Institute estimates that about just over 20 percent of these enrollees will become uninsured, with the remaining transitioning to another coverage source. But that’s still four million people at risk.
Medicaid was never intended to provide continuous coverage, nor was it designed to serve all poor people. (This is not a normative statement, just a statement of historical and political fact.) Tracing the evolution of the program can help us understand its limited reach. Medicaid was initially only available to those who received cash assistance, a program built upon explicitly racist prior law. Aid to Families with Dependent Children (AFDC), the country’s original cash assistance program, gave states control over who was eligible—and who was not. Many states implemented eligibility rules that were explicitly designed to exclude Black people, particularly in the South.
While President Clinton’s 1996 Welfare Reform delinked Medicaid from AFDC, Medicaid’s origin story reveals the program’s intentionally constrained reach. And while the Affordable Care Act eliminated categorical eligibility in most states, the program’s reach is still limited—even in states that did expand their programs.
The program’s decentralized structure challenges advocacy organization. Unlike federalized programs like Medicare, Medicaid does not have a strong voting bloc. And, as the privatization of Medicaid has grown (70 percent of enrollees receive their government-financed benefits from private insurers, like United Healthcare), research suggests it may be harder for enrollees to recognize the role of the government in the provision of Medicaid. This could affect the role people see the government playing in their lives, and thus how they support (or don’t) the program.
Moreover, research has shown that the composition of a program’s beneficiaries can determine its political support. While the majority of people with Medicaid coverage are white, racially marginalized groups are disproportionately represented among the program’s beneficiaries. Ideas of deservingness are highly racialized. Consider the likely outrage that would ensue if millions of seniors with Medicare were projected to lose coverage.
Onerous renewal processes that drive coverage loss are a result of politics and policy choices. One way states can reduce Medicaid spending is by imposing limits on eligibility, or construct burdens that make it more difficult to enroll in or maintain coverage. States can rely on administrative burdens—and, thus, people being unable to access and maintain their benefits—as a tool to manage the costs of Medicaid programs. Medicaid enrollees frequently experienced gaps in coverage (or “churn”) because of challenges navigating the renewal process well before the pandemic. It’s just that these coverage disruptions weren’t all happening at the same time.
One could argue that because of the state variation in the program, it makes more sense to just talk about unwinding at the state and local level. A part of this is true—unwinding plans and capacity to facilitate renewals are really state-specific. You could also attribute the lack of attention to uncertainty surrounding how many people will be affected—and exactly who will fall through the cracks.
But the unwinding—and the lack of national attention from media and policymakers—points to the other political reality that seems to be absent from (this particular) policy discussion: the US does not guarantee universal coverage, and Medicaid was most certainly never conceptualized to fill this role.
Research for this piece was supported by Arnold Ventures.