Medicaid Redetermination and Your Medical Plan
By Schuyler File, Employee Benefits Consultant
Medicaid enrollment has ballooned since the start of the COVID Pandemic. This is attributable, in large part, to a continuous enrollment provision for Medicaid coverage and enhanced federal funding, both responses to the COVID public health emergency (PHE). This has impacted employer-sponsored insurance enrollments, especially among lower-income employee populations. Many employees enrolled in Medicaid coverage and because they did not need to demonstrate continued eligibility, they waived employer coverage for dependents and, in some cases, for themselves. Medicaid/CHIP enrollment in Wisconsin increased 34% from just over 1.05 million in February 2020 to 1.41 million as of November 2022. Nationally, Medicaid/CHIP enrollment increased 29% from 71.1 million to more than 91.7 million over the same period.
Beginning March 31, 2023, states will begin redetermining whether Medicaid participants are eligible for the program, thus signaling the end of the continuous enrollment provision that had effectively suspended ongoing Medicaid eligibility verification. Since each state administers its own Medicaid program, the redetermination process will look different in different states. Predictions vary on the number of people who may lose Medicaid coverage after redetermination, but estimates range from 10 -18 million people losing Medicaid coverage once the enhancements are completely phased out over the next year.
Health plan sponsors, particularly with lower income populations, may see an increase in enrollment starting in the second quarter of 2023 as employees and their dependents lose Medicaid coverage. The Association for Health Insurance Plans (AHIP) estimates that as many as 9.5 million Americans will enroll in employer-sponsored coverage. In Wisconsin, we expect up to 170,000 employees and dependents will enroll in employer-sponsored coverage because of the loss of BadgerCare coverage.
From a CFO/Finance perspective – be prepared for medical plan participation to increase to pre-pandemic levels over the next year. For example, if medical plan participation was 80% among eligible employees in 2020 and dipped to 76% over the last three years, expect an increase over the next year to near pre-pandemic levels. Note that significant changes in plan design and contribution since 2020 could impact the return of participation to pre-pandemic levels.
From an HR perspective – help your employees ensure a smooth transition from Medicaid/CHIP (BadgerCare in Wisconsin) to your employer-sponsored plan. Remember that the loss of Medicaid/CHIP (BadgerCare) is a HIPAA qualifying event. Typically, employees have 30 days after the loss of coverage to make a mid-year election, however, the PHE extended the normal qualifying event period to the lesser of 60 days after the end of the PHE or 1 year. The end of the PHE is May 11, 2023. Anyone who loses coverage in 2023 prior to June 10 will have until July 11 (60 days after the end of the PHE) to make a qualifying election. Anyone who loses coverage after June 10 will have the normal 30 days to make a qualifying election.
Below is a summary of individuals who may be impacted by redetermination in Wisconsin.
Who is eligible for BadgerCare in Wisconsin?
- Children under the age of 19 in households at or below 300% of the federal poverty level (FPL)
- Pregnant women with incomes up to 300% of the FPL
- Parents and relatives caring for a child up to 100% of FPL
The range of Modified Adjusted Gross Income at 100-300% of the FPL is below based on household size. If you have employees near these income levels, then it is possible that redetermination may impact employees and/or employees’ families.
- For a Single Household - $14,580 -$43,740
- Family of Two - $19,719.96 - $59,159.88
- Family of Three - $24,860.04 - $74,580.12
- Family of Four - $30,000 - $90,000
- Family of Five - $35,139.96 - $105,419
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