COVID-19 Medicaid Enrollment Is Not Tied to Unemployment Rates

October 08, 2020 - The link between Medicaid enrollment and unemployment has not been substantiated so far during the pandemic but, rather, varied largely based on state policies, a report published in Health Affairs discovered.

“Given the central role that Medicaid will play in maintaining insurance coverage for Ameri- cans struggling with job loss, it is important to directly evaluate how COVID-19 is affecting Medicaid coverage,” the researchers explained. “In this article we examine changes in state Medicaid enrollment from the beginning of March 2020 through the beginning of June 2020, to assess the preliminary effects of COVID-19 on Medicaid program enrollments.”

Several research organizations have released varying projections on the levels of unemployment, Medicaid enrollment, and employer-sponsored coverage loss.

This latest study analyzed data from 44 states and the District of Columbia that publicly released Medicaid enrollment data between March and June 2020. Not all of the states had data available for both months in the study period, so the final analysis included 25 states that had published complete enrollment data by the beginning of June 2020.

Among expansion states, the researchers found that Kentucky saw the highest per capita Medicaid enrollment. The state took on 348.9 more individuals for every 10,000 non-elderly residents. Indiana followed with 204.4 enrollees per 10,000 residents.

Medicaid expansion was an important factor in these calculations. Florida saw the largest absolute increase in enrollees and also saw the largest increase among nonexpansion states, with 175 new enrollees per 10,000 nonelderly residents.

The study examined enrollment growth for those eligible for Medicaid due to Medicaid expansion. In particular, Indiana, Louisiana, and Maine saw high enrollment growth per capita in their Medicaid enrollment levels.

Indiana, which had the strongest expansion-related enrollment growth, saw 137.8 new newly eligible enrollees for every 10,000 of nonelderly residents.

“We found greater relative enrollment increases for Medicaid expansion-eligible populations than for overall Medicaid enrollment,” the study noted. “This may be because expansion-eligible populations would have been more likely to be covered by employer-sponsored insurance before COVID-19 and thus would be more motivated to enroll in Medicaid to maintain coverage after job loss.”

The researchers concluded that in the first three months of the pandemic, the Medicaid program served its purpose of capturing new enrollees as a result of the crisis.

The enrollment levels in these states in the pandemic’s first three months represent significant shifts in a short amount of time. The researchers compared the 1.7 million enrollment boost in three months in 26 states to gains during the Great Recession of 2009 through 2010.

In that timeframe, annual Medicaid enrollment nationwide jumped 8.9 percent in the first year and 5.9 percent in the second. By comparison, some states saw enrollment gains of 6 percent or more in just three months due to the pandemic.

“Interestingly, at least for the first three months of the COVID-19 pandemic, state-level Medicaid enrollment growth was not correlated with job losses,” the study found. “This result is somewhat surprising, and it may reflect differences in household size, income, and policies across states.”

The high rate of furloughed workers, who may still receive coverage through their employer-sponsored health plan although they are temporarily unemployed, may lend itself to this outcome as well as the impacts of widespread unionization in states that had lower unemployment and Medicaid enrollment increases.

Also, some individuals defer enrolling in Medicaid until they require healthcare.

Alternatively, unemployed potential enrollees may face uncertainties around whether receiving $600 in supplemental unemployment compensation makes them ineligible for Medicaid based on income, as is the case with other forms of unemployment compensation. In actuality, supplemental unemployment compensation does not count toward income.

“On net, the way that various factors outside of job losses vary across states could explain why there is no correlation between COVID-19-related job losses and enrollment changes. Whether enrollment changes will eventually reflect job losses, as in past recessions, is an open question for future research,” researchers concluded.