Looking Ahead in US Healthcare Services: Key Trends Impacting the Industry
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Unprecedented staff shortages. Unconventional partnerships. The rise of value-based care. These and other trends are impacting the U.S. healthcare services industry.

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 Response 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:i

  • A temporary increase of 6.2 percentage points in the Federal Medical Assistance Percentage (FMAP) — the federal government’s share of Medicaid costs — to qualifying states

  • A maintenance of effort (MOE) protection, also known as “continuous coverage,” which prevents states that receive the increased FMAP from terminating people’s Medicaid coverage during the PHE

The PHE was renewed 12 times in 90-day increments, keeping in place the increased FMAP and MOE 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 Children’s Health Insurance Program (CHIP) approached 92 million as of November 2022, an increase of over 21 million since February 2020;ii however, on 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 each state 12 months from its starting point to initiate all renewals, and 14 months from its start to complete all renewals.iii

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.iv 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, providers and patients.

By the numbers: What could Medicaid redeterminations look like?

There are three main variables defining what the impact of Medicaid redeterminations will be:

  1. How many people will lose Medicaid coverage? 

  1. How will the disenrollments be distributed over time?

  1. What type of insurance will those who lose their Medicaid coverage receive? 

These 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.

The number of people who will lose Medicaid coverage 

Following 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 a consensus of around 15 million total Medicaid/CHIP disenrollments due to Medicaid redeterminations, with some caveats (see Figure 1).v vi

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 insurance (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 needed 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 million 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. 

How the disenrollments will be distributed over time 

Over 40 states have published plans in varying detail 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):vii

  • Time-based approach: Distribute renewals based on month or on amount of time since enrollee’s 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 (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). 

Additional 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 possible month for disenrollments, many states will have their first disenrollments in May or June. 

  • CMS recommends that states initiate no more than one-ninth of their renewals in any given month, to better balance the workload and lead to fewer inappropriate disenrollments. States will have to report their expected distribution of renewals to CMS.viii

Given the situation’s complexity, the mix of state redetermination approaches and the workforce constraints, we expect the likely distribution of disenrollments to be: 

  • Somewhat lower 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 population-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 time 

What type of insurance will those who lose their Medicaid coverage receive? 

In 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 coverage or become uninsured altogether. Academic, government 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 (mainly 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, however, 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 here could be approximately 3.8 million uninsured individuals following the redeterminations. 

Implications across the healthcare ecosystem  

The impact of Medicaid redeterminations will be felt across the healthcare ecosystem — 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 while 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 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 commercial and other government service lines will benefit from shifts to ESI and ACA exchange plans.

Following 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 giveback after redeterminations resume.ix Molina anticipates the potential loss of 300,000 or more Medicaid members when redeterminations commence.x This presents these plans with a large incentive to act in the short term and utilize these opportunities for the long term as well. Thus, MCOs should:xi xii

  • Proactively assist state Medicaid agencies in all ways possible. This 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 presence 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 example introduced new marketplace product designs in 2022.xiii

The nation’s 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 selecting 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.xiv This achievement signals the promise of greater public awareness of and access to marketplace coverage.  

Given the Inflation Reduction Act extension 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:xv xvi xvii

  • Gaining timely information from state agencies to target ineligible Medicaid 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 disenrolled 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, 2024 

  • Maintaining compliance with complex Federal Communications Commission regulations regarding outreach to members 

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 both dollars and insured members. 


iU.S. Congress, “Public Law 116-127 – Mar. 18, 2020: Families First Coronavirus Response Act.” https://www.congress.gov/116/plaws/publ127/PLAW-116publ127.pdf
iiCenters for Medicare & Medicaid Services, “November 2022 Medicaid and CHIP Enrollment Trends Snapshot.” https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/november-2022-medicaid-chip-enrollment-trend-snapshot.pdf
iiiCenters 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 Provisions in the Consolidations Appropriations Act, 2023.” https://www.medicaid.gov/federal-policy-guidance/downloads/sho23002.pdf
ivU.S. Congress, “H.R. 2617 Enrolled Bill: Consolidated Appropriations Act, 2023.” https://www.congress.gov/bill/117th-congress/house-bill/2617/text
vU.S. Department of Health and Human Services, “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
viUrban Institute, “The Impact of the COVID-19 Public Health 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
viiCenters for Medicare & Medicaid Services, “Medicaid and CHIP Unwinding Planning Efforts: Summary of Best & Promising State Practices from CMS/State Discussions, April 2022.” https://www.medicaid.gov/resources-for-states/downloads/state-unwinding-best-practices.pdf
viiiCenters 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 Provisions in the Consolidated Appropriations Act, 2023.” https://www.medicaid.gov/federal-policy-guidance/downloads/sho23002.pdf
ixCentene Corp., “Centene Corporation Q4 Earnings Call.” https://investors.centene.com/financial-results
xMolina Healthcare, “Q4 2022 Molina Healthcare, Inc. Earnings Conference Call.” https://investors.molinahealthcare.com/events/event-details/q4-2022-molina-healthcare-inc-earnings-conference-call
xiBecker’s Payer Issues, “Payers prep for the great 2023 shuffle from Medicaid to ACA coverage.” https://www.beckerspayer.com/policy-updates/payers-prep-for-the-great-2023-shuffle-from-medicaid-to-aca-coverage.html
xiiKaiser 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-care-plans-can-help-enrollees-maintain-coverage-as-the-public-health-emergency-unwinds/#
xiiiCentene Corp., “2021 Annual Review.” https://www.centene.com/content/dam/centenedotcom/investor_docs/Centene-2021-Annual-Review_508.pdf
xivU.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 Marketplaces 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
xvBecker’s Payer Issues, “Payers prep for the great 2023 shuffle from Medicaid to ACA coverage.” https://www.beckerspayer.com/policy-updates/payers-prep-for-the-great-2023-shuffle-from-medicaid-to-aca-coverage.html
xviUrban Institute, “Preparing for the Biggest Coverage Event since the Affordable Care Act. Perspectives from State Officials on the End of Medicaid’s Continuous 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
xviiBright Spots in Healthcare (webinar), “2023 Strategy Session: Member Redetermination, CAHPS, and Social Needs.” https://www.sharedpurposeconnect.com/events/2023-strategy-session-member-redetermination-cahps-and-social-needs/
xviiiU.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-low

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