HMA Weekly Roundup

Medicaid Enrollment: An Unwinding Update and HMAIS’s Quarterly Enrollment Report

This week, our In Focus section addresses the significant change in national and state-specific Medicaid enrollment as a result of the Medicaid unwinding process. First, we highlight notable enrollment changes in the post-unwinding months. Next, we provide an update on second quarter (Q2) 2024 monthly capitated, risk-based Medicaid managed care enrollment. The experiences of the unwinding and the impact and current enrollment landscape are directly affecting strategic and programmatic decisions across all states, Medicaid managed care plans, and their partners and stakeholders. 

Background 

As explained in previous In Focus articles (here, here and here), federal COVID-19 relief laws allowed states to receive higher federal funding for Medicaid as long as they did not terminate Medicaid coverage for anyone enrolled in Medicaid during the public health emergency. One result of the continuous coverage policy was sustained growth in Medicaid enrollment. More than 21 million additional individuals were continuously enrolled in Medicaid for up to three years between February 2020 and March 2023. In December 2022, Congress ended the Medicaid continuous coverage policy after March 31, 2023. States were allowed to begin processing redeterminations as early as February 2023 and start disenrolling ineligible individuals as early as April 2023. 

The Centers for Medicare & Medicaid Services (CMS) offered states a series of flexibilities intended to facilitate the unwinding process, which reduced some administrative burden and improved continuity of coverage for Medicaid enrollees. Most states adopted at least one of the flexibilities, with many using multiple options. Nonetheless, variations in timing and implementation of the flexibilities have affected their effectiveness. 

California, for example, received federal approval for flexibilities in its automatic redetermination process early on but implemented enhanced automation months into its unwinding process. This increased automation cut the number of disenrollments in half. Another key challenge during the unwinding was contacting enrollees about the redetermination process, and several of the federal flexibilities involved increased coordination with Medicaid managed care organizations (MCOs). 

Key Takeaways 

States lost an average of 15 percent of their peak COVID-era Medicaid enrollment between March 2023 and June 2024. Several effective practices could be adopted to address those individuals and families who remain eligible but not enrolled and to minimize procedural disenrollments in the future. Below is a snapshot of data and early insights Health Management Associates, Inc. (HMA), experts identified through their work with Medicaid stakeholders and analysis of Medicaid enrollment and eligibility data. 

• Some states are several months beyond their anticipated unwinding period. Still, more than half of states continue to see small net reductions in their Medicaid populations (see Table 1). 

Table 1. Enrollment Changes during and after Unwinding, September 2024 

• Despite the ongoing enrollment reductions, net Medicaid enrollment generally remains above pre-pandemic levels and is likely to remain so. This enrollment change has been boosted by several states—Idaho, Utah, Nebraska, Oklahoma, Missouri, South Dakota, and North Carolina—which expanded their Medicaid programs immediately before or during the COVID-19 pandemic. 

• Following the official end of the Medicaid unwinding period, the acuity of the Medicaid population increased significantly. Early actuarial assessments, including those conducted by HMA actuaries, indicate that the average Medicaid population is older and sicker than before the unwinding started. Consequently, Medicaid populations may be more complex and expensive to manage—prompting states and managed care plans to reassess their capitation rates for current and future years. The 24th annual Medicaid Budget Survey conducted by The Kaiser Family Foundation (KFF) and Health Management Associates (HMA), in collaboration with the National Association of Medicaid Directors (NAMD), also provides key take-aways on provider rates and managed care, among other issues in the report As Pandemic-Era Policies End, Medicaid Programs Focus on Enrollee Access and Reducing Health Disparities Amid Future Uncertainties: Results from an Annual Medicaid Budget Survey for State Fiscal Years 2024 and 2025. 

Medicaid Managed Care Enrollment Update – Q2 2024 

Today, HMA Information Services (HMAIS) posted a quarterly update for Medicaid managed care enrollment. We collected and analyzed monthly Medicaid enrollment data from the second quarter (Q2) of 2024 (April−June) in capitated, risk-based managed care in 29 states. These data allow for the timely analysis of enrollment trends across states and MCOs as well as state and plan-specific analyses of managed care enrollment following the official end of the Medicaid unwinding period.1  

The 29 states highlighted in this review have released monthly Medicaid managed care enrollment data via a public website or in response to HMA’s public records request. This report reflects the most recent data posted or obtained. HMA has made the following observations related to the enrollment data (see Table 2): 

• As of June 2024, Medicaid managed care enrollment across the 29 states tracked in this report was 62.7 million, down by 10.2 million (14 percent) year over year. 

• In our review, all but one state, Mississippi, saw decreases in enrollment in June 2024 because of Medicaid redeterminations. 

• The 22 expansion states included in the review—Arizona, California, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Virginia, Washington, and West Virginia—have seen net Medicaid managed care enrollment decrease by 6.2 million (11.1 percent) in the past year, to 50.1 million members at the end of Q2 2024. 

• The seven states that had not expanded Medicaid as of June 2024—Florida, Georgia, Mississippi, South Carolina, Tennessee, Texas, and Wisconsin—have seen Medicaid managed care enrollment decrease 24 percent to 12.6 million members at the end of Q2 2024. 

Table 2. Monthly MCO Enrollment by State, April−June 2024 

It is important to note the limitations of the data presented. First, not all states report the data at the same time during the month. Some of these figures reflect beginning of the month totals, whereas others reflect an end of the month snapshot. Second, in some cases the data are comprehensive in that they cover all state-sponsored health programs that offer managed care options; in other cases, the data reflect only a subset of the broader managed Medicaid population. This limitation complicates comparison of the data described above with figures reported by publicly traded Medicaid MCOs. Hence, the data in Table 1 should be viewed as a sampling of enrollment trends across these states rather than a comprehensive comparison, which cannot be established based solely on publicly available monthly enrollment data. 

Connect with Us 

More detailed information on the Medicaid managed care landscape is available with a subscription to HMAIS, which collects and aggregates Medicaid enrollment data, health plan financials, and additional actionable information about eligibility expansions, demonstration and waiver initiatives, as well as population- and service-specific information, such as Medicare and Medicaid dually eligible beneficiaries, ABD populations, long-term services and supports, and patient-centered medical homes. HMAIS also includes a comprehensive public documents library containing Medicaid requests for proposals and responses, model contracts, scoring sheets, and protests.  

For additional analysis of the Medicaid unwinding initiative and HMAIS’s enrollment data and subscription service, contact HMA Managing Director Andrea Maresca, Senior Consultant Alona Nenko, and HMA Principal Lora Saunders.  

In Focus: CMS Releases Draft 2026 Marketplace Benefit and Payment Parameters

Our second  In Focus article reviews the recently proposed Notice of Benefit and Payment Parameters (NBPP) for 2026. The Centers for Medicare & Medicaid Services (CMS) proposed rule, released October 10, 2024, describes the policy and payment changes that will affect the Affordable Care Act (ACA) markets in 2026. Public comments must be submitted to CMS by November 12, 2024. Key highlights from the proposed rule follow. 

Broker Oversight and Monitoring 

CMS proposes to increase oversight and accountability for brokers and agents that write policies through HealthCare.gov. In response to the discovery earlier this year of fraudulent actors reassigning broker designations and switching consumer enrollments without their permission or knowledge, CMS has already implemented several corrective actions, including the suspension of 850 Healthcare.gov agents and brokers. CMS intends to build on these actions through the following interventions: 

• Clarify that lead agents, typically an agency owner or executive, are subject to the same rules as individual brokers, agents, and web-brokers and that enforcement action can be taken against the lead agents if they explicitly or implicitly condone misconduct or fraud 

• Broaden CMS’s authority to suspend broker and agent system access, inclusive of instances of suspected misconduct that affects eligibility determinations, operations, applicants, or systems 

• Update the model consent form to include documentation of the broker reviewing and confirming the accuracy of submitted application information with the consumer. 

Marketplace User Fees 

CMS proposes to increase the user fee collected to pay for administration of HealthCare.gov as follows: 

• Between 1.8 percent and 2.5 percent in 2026 for federally facilitated marketplaces (FFM) states, up from 1.5 percent of monthly premiums in 2025 

• Between 1.4 percent and 2 percent in 2026 for state-based marketplaces on the federal platform (SBM-FPs), up from 1.2 percent in 2025 

The proposed changes are due, in part, to uncertainty caused by the future of the enhanced premium tax credits that are set to expire at the end of 2025. The enhanced premium tax credits are the driving force behind the increase in nationwide marketplace enrollment to more than 21 million people in 2020 from 11.4 million in 2020. If not extended, or if it takes past March 2025 for Congress to act, CMS has indicated the user fees will increase in 2026 to 2.5 percent for FFM states and 2% for SBM-FPs to accommodate expected enrollment declines. Notably, after several years of significant decreases, CMS is proposing to increase the user fees above 2025 levels regardless of the outcome of the enhanced premium tax credits. 

Plan Limits for Non-Standard Plans 

CMS proposes to clarify rules limiting the number of non-standardized plans an issuer can offer through HealthCare.gov (two or less in 2025). The limit is applied per product network type (e.g., HMO, PPO), per metal level, per service area, per inclusion of adult/pediatric dental and/or vision benefits (with additional exceptions, starting in payment year (PY) 2025, for plans with specific design features that would substantially benefit consumers and meet other requirements). To maximize the number of non-standardized plans offered on HealthCare.gov, an issuer could offer up to 16 plans per metal level and network type in a given service area by creating every combination of adult dental, pediatric dental, and adult vision (or even more, if plans meet the exception requirements). 

Though CMS does not limit the number of standardized plan options an issuer offers on HealthCare.gov, they propose reinstating a meaningful difference standard to prevent consumer confusion and unnecessary plan proliferation. The proposed standard is similar to the removed standard from 2019; for plans in the same metal level, product type, and service area, a reasonable consumer needs to be able to identify at least one material difference in benefit coverage, provider networks, and/or formulary. 

New Premium Payment Threshold Options for Issuers 

CMS proposes new options for issuers to avoid triggering late payment grace periods for consumers who make most but not all of their premium payment to minimize termination of coverage for consumers who owe a small amount. The options include: 

• The current option of a “reasonable” percentage of net premium. CMS proposes codifying 95 percent as the minimum threshold. 

• New proposals of as low as 99 percent of gross premium and a fixed-dollar threshold of $5 or less. 

CMS is also considering limiting issuers to offering just one payment threshold option—either fixed-dollar or percent of premium—to avoid consumer confusion. 

Increased Transparency for State-Based Marketplaces 

CMS proposes new initiatives to promote transparency into state-based marketplace (SBM) program operations. These initiatives include: 

• Publishing State Marketplace Annual Report Tool (SMART) submissions, which are used to monitor SBM compliance with select eligibility and enrollment, program integrity, and financial reporting requirements. SBMs must annually participate in independent programmatic and financial audits as part of SMART. CMS proposes to make the 2023 SMART submissions public in spring 2025. 

• Expanding the disclosure of SBM information to include data collected but not currently published, including details on SBM eligibility, enrollment, and plan certification policies as well as Navigator program spending, call center metrics, and website traffic data. 

SBMs already are required to publish programmatic and financial audit summaries and generally publish robust data and information on their program operations through public reports and meetings; however, this information is neither centrally located nor consistently published across all SBMs. 

Key Considerations 

The proposed 2026 NBPP would build on previous actions that CMS has taken to address fraudulent broker and agent activity and to shore up financial sustainability of Healthcare.gov operations in light of uncertainty about the enhanced premium tax credits. It also seeks to make clear how plan variations adding dental or vision benefits factor into HealthCare.gov plan limits and gives issuers new premium payment threshold options. Lastly, it proposes new transparency requirements for SBMs. Interested stakeholders, including SBMs and issuers, should monitor how these proposed changes will affect consumers, operational processes, product strategy, and financial sustainability. 

Connect With Us 

The Health Management Associates, Inc., team has the depth, experience, and subject matter expertise to assist with tailored analysis and the modeling capabilities to assess the policy impacts to consumers, marketplaces, and issuers. If you have questions or want to discuss the proposed rule, contact Zach Sherman ([email protected]) or Hannah Turner ([email protected]). 

For additional information on elements of the proposed NBPP not discussed here, Wakely Consulting’s White Paper highlights the proposed changes to the Risk Adjustment program, Medical Loss Ratio, and the Actuarial Value Calculator, among other changes.