Policy Analysis | February 2021
2020 Medicaid Enrollment in the SLC Region
Medicaid enrollment surged in 2020 as the COVID-19 pandemic caused historic economic upheaval across the United States. Sudden and extensive job losses in March and April 2020 – followed by consistently high unemployment rates in subsequent months – led to millions of people losing income and, in many cases, employer-sponsored health insurance, rendering them newly eligible for Medicaid. According to the Centers for Medicare and Medicaid Services (CMS), total Medicaid enrollment in the United States increased 9.2 percent between January and September 2020, the last month for which CMS data is available. By contrast, enrollment during the same period in 2019 decreased 0.6 percent.1
While the economic fallout of the pandemic is a driving factor behind the surge in the Medicaid-eligible population, part of the enrollment growth also is attributed to provisions in the federal Families First Coronavirus Response Act (FFCRA), passed in March 2020 to mitigate the economic impacts of the pandemic. In return for access to a 6.2 percent increase in the federal Medicaid match, the FFCRA included a provision that prohibited state Medicaid agencies from terminating coverage for enrollees during the federally declared COVID-19 state of emergency. The continuous coverage provisions applied to most Medicaid beneficiaries, regardless of changes in circumstances that normally would make them ineligible.2 Although CMS has loosened the restrictions since FFCRA was passed – such as allowing states to decrease benefits, increase cost-sharing and, in some cases, terminate enrollment – there likely are many people still enrolled in Medicaid who may not be eligible for the program once the federal state of emergency ceases.
As states continue grappling with the fallout of the pandemic, the fiscal outlook fortunately is not as severe as initially predicted during the early months of the pandemic, when forecasters expected a downtown comparable to the Great Recession. One analysis, from the Center of Budget and Policy Priorities, found that revenues for fiscal year 2020 were about 2 percent below states' pre-pandemic projections, amounting to $22 billion nationally, a significant amount, but not nearly as dire as many originally anticipated.3 Nevertheless, many states already have announced reductions in spending for the next fiscal year, with high unemployment, lower-than-anticipated tax receipts and rising healthcare costs creating an uncertain outlook for the remainder of 2021. As a result, state leaders face difficult funding decisions in the months ahead regarding important public services, including education, infrastructure and public health.
Elevated enrollment in Medicaid, one of the largest items in states' budgets, may pose problems for state budget writers during 2021 and beyond. State spending on Medicaid increased by more than 8 percent in fiscal year 2020, according to a survey of state Medicaid directors conducted by the Kaiser Family Foundation, compared to 6.3 percent growth the previous fiscal year.4 To offset surging enrollment and the higher costs associated with it, states may be forced to make difficult cuts to Medicaid services.
Additional federal funding for state and local governments would be a boon for strained budgets, particularly during fiscal years 2021 and 2022. High unemployment rates and slower business activity, along with the continued uncertainty of the pandemic's trajectory in 2021, will require states to act very cautiously until the economic and public health outlook stabilizes. Additional federal assistance could prevent, or at least mitigate, cuts to Medicaid and other essential public services. With the new federal administration, aid for state and local governments could be on the horizon, though the exact amount and spending limitations are unknown variables.
To highlight how the pandemic has affected Medicaid enrollment, this SLC Policy Analysis reviews data reported monthly by CMS. The data is separated into three categories to underscore the particular challenges that emerged in 2020:
- The quarterly change in the number of Medicaid enrollees between January and September 2020, the last month for which CMS data currently is available;
- The quarterly change in the number of Medicaid enrollees between January and September 2019, provided as a point of comparison to the 2020 figures; and
- 2019/2020 year-over-year monthly changes in Medicaid enrollment between January and September.
Notably, the data lags by approximately four months, meaning the complete ramifications of the pandemic on Medicaid enrollment in 2020 will not be recorded until April 2021. Several states release monthly Medicaid enrollment that includes more recent information than the CMS data; however, because not all states release monthly figures, this SLC Policy Analysis includes only the CMS data to provide consistency among states.
Medicaid Enrollment in the SLC Region
Between the first and third quarters of 2020, Medicaid enrollment increased by significant margins across the SLC region. The lowest quarterly growth rate, 4.2 percent, was recorded in South Carolina, while the largest increase, 17.3 percent, occurred in Kentucky. In addition to Kentucky, four other states – Florida, Missouri, Oklahoma and Texas – had enrollment increases greater than 10 percent. Overall, Medicaid enrollment growth between the first and third quarters of 2020 was higher than the national average, 8.2 percent, in nine of the 15 SLC states (see Table 1).
Medicaid Enrollment in SLC States: Q1 - Q3 2020
Q1 - Q3
By contrast, enrollment declined or remained flat in the majority of states during the same period in 2019 (see Table 2); in states that experienced enrollment growth between the first and third quarters of 2019, the increases were modest, from 0.6 percent in South Carolina, to 1.2 percent in Georgia. Virginia was an outlier in 2019, with Medicaid enrollment increasing 7.5 percent between the first and third quarters, a result of the state's Medicaid expansion under the Affordable Care Act, which went into effect in January 2019. From that point forward, Medicaid enrollment in Virginia increased every month through September 2020.
Medicaid Enrollment in SLC States: Q1 - Q3 2019
Q1 - Q3
The Medicaid enrollment surge precipitated by the pandemic is particularly apparent when comparing year-over-year monthly differences in 2019 and 2020. In January 2020, year-over-year enrollment declined in 12 of the 15 SLC states, a reflection of the relatively strong economy prior to the pandemic. Similarly, year-over-year enrollment in February and March 2020 decreased in 11 states and nine states, respectively. The average year-over-year enrollment declines across the SLC region in January, February and March 2020 were 0.5 percent, 0.8 percent and 0.3 percent, respectively.
Beginning in April 2020 – following the passage of the Families First Coronavirus Response Act, which required continuous enrollment for Medicaid beneficiaries, in addition to widespread business closures, restrictions on movement and heavy job losses – year-over-year Medicaid enrollment increased across most of the region, with 11 states recording increases. Regionally, year-over-year growth was 2.0 percent in April and accelerated during the subsequent months, with the regional average reaching 4.2 percent in May, 6.1 percent in June, 7.3 percent in July, 8.2 percent in August, and 9.5 percent in September (see Table 3).
Year-over-year monthly percent change in Medicaid enrollment in SLC States: January - September 2019/2020
As additional data is released by CMS, the likelihood that year-over-year Medicaid enrollment increases continued during the final months of 2020 is high. The spread of the virus across the United States, particularly during the fourth quarter, accompanied by consistently high unemployment, are signals that Medicaid enrollment remained elevated in October, November and December.
Medicaid is one of the largest portions of states' budgets, comprising nearly 29 percent of total state spending in fiscal year 2019.5 Consequently, significant changes to Medicaid enrollment have broader ramifications for other fiscal priorities, such as education, infrastructure and public health. As the COVID-19 pandemic continues to negatively affect the economy, job markets and healthcare, states must account for these uncertainties by acting cautiously during fiscal year 2021 and, possibly, fiscal year 2022. Medicaid enrollment numbers likely will remain elevated in 2021 which, inevitably, will require states to make compromises to account for the resulting higher costs, either by cutting services or reducing spending in other areas. Any federal assistance allocated for state and local governments will provide a major boost, possibly offsetting some of the difficult decisions that will be made in the months ahead; however, absent any support, budget projections likely will remain austere.
1 Monthly Medicaid & CHIP Application, Eligibility Determination, and Enrollment Reports & Data, Centers for Medicare & Medicaid Services, accessed January 20, 2021, https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/medicaid-chip-enrollment-data/monthly-medicaid-chip-application-eligibility-determination-and-enrollment-reports-data/index.html.
2 Mary Beth Musumeci, Key Questions About the New Increase in Federal Medicaid Matching Funds for COVID-19, Kaiser Family Foundation, accessed January 13, 2021, https://www.kff.org/report-section/key-questions-about-the-new-increase-in-federal-medicaid-issue-brief/#endnote_link_462529-12.
3 Michael Leachman and Elizabeth McNichol, Pandemic's Impact on State Revenues Less Than Earlier Expected But Still Severe, Center on Budget & Policy Priorities, accessed January 14, 2021, https://www.cbpp.org/research/state-budget-and-tax/pandemics-impact-on-state-revenues-less-than-earlier-expected-but.
4 Robin Rudowitz, Elizabeth Hinton, Madeline Guth and Lina Stolyar, Medicaid Enrollment & Spending Growth: FY 2020 & 2021, Kaiser Family Foundation, accessed January 14, 2021, https://www.kff.org/medicaid/issue-brief/medicaid-enrollment-spending-growth-fy-2020-2021/.
5 2019 State Expenditure Report, The National Association of State Budget Officers, accessed January 15, 2021, https://higherlogicdownload.s3.amazonaws.com/NASBO/9d2d2db1-c943-4f1b-b750-0fca152d64c2/UploadedImages/SER%20Archive/2019_State_Expenditure_Report-S.pdf.