Medicaid enrollment drops, but many newly insured patients switch to commercial plans
CBO had projected 6 million Medicaid enrollees would become uninsured after eligibility redetermination restarted.
Eligibility redeterminations for Medicaid enrollment were widely expected to result in many million more uninsured but the result was much more nuanced, according to hospital data.
Medicaid enrollment peaked at 94.5 million in April 2023. That month the states restarted eligibility determinations, which were suspended under an unprecedented federal statutory change during the COVID-19 pandemic.
Most states completed their Medicaid redeterminations — also called the unwinding — by mid-2024, according to a CMS document.
By October 2024, enrollments had fallen to 79.3 million.
A tracker by KFF concluded more than 25 million people were disenrolled from Medicaid during unwinding. It concluded that overall enrollment only declined by about 13 million people due to enrollment of newly eligible.
Hospitals were bracing for a surge in uninsured patients because various projections claimed that would occur. The highest profile was a May 2024 estimate from the Congressional Budget Office (CBO) that only 15.5 million would be disenrolled but 6.2 million would become uninsured.
Ultimately, the percentage of adults living in the United States who were uninsured did not significantly change between 2023 (10.9%) and the first six months of 2024 (11.1%), according to a December 2024 report from the Centers for Disease Control and Prevention.
It’s a result some hospitals also saw.
“There was a lot of concern around Medicaid, particularly with redetermination, that the rolls were being cut, a lot of people would fall off the Medicaid rolls and that was going to be a big headwind for providers,” Kevin Hammons, CFO of Community Health Systems (CHS), said at a March 18 conference.
“That occurred last year and although we have seen some decline in Medicaid volume, a lot of the people that came out of Medicaid ended up with commercial insurance. And we’re probably net-net better off,” Hammon said. “We did not see an increase in the uninsured that everyone was so concerned about.”
Hammons said his health system saw some volumes switching from Medicaid to Affordable Care Act marketplace plans. Enrollments in ACA plans increased to 24 million this year from 21 million in 2024.
The uninsurance finding comes amid recent projections that Republican Medicaid policy changes, such as instituting work requirements for able-bodied adults, would surge uninsurance. For instance, the liberal Center on Budget and Policy Priorities projected 36 million Medicaid enrollees — including people in every state — could be at risk of losing coverage from work requirements.
Other’s experience
Other for-profit health systems had similar experiences to CHS. For example, HCA Healthcare reported that admission of uninsured patients remained at 7% in 2024 — the same share as the two previous years. Meanwhile, from 2023 to 2024, its managed Medicaid patients decreased slightly (from 13% to 11%), while its commercial patients increased slightly (from 30% to 32%).
Tenet Healthcare reported its share of patient revenue from the uninsured — in all settings — decreased from 1% in 2022 to 0.5% in 2024. Despite the unwinding, its share of revenue from Medicaid increased from 8.5% in 2023 to 10.3% in 2024.
Tenet’s charity care and uninsured as a share of admissions remained flat at 4.5% in both 2023 and 2024.
Medicaid increase
Even after Medicaid shed millions of its enrollees since March 2023, health system revenue from the program continued to increase.
Intermountain Healthcare reported that its patient services revenue from Medicaid increased from $1.41 billion in 2023 to $1.48 billion in 2024. However, its charity care costs also increased 15% to $272 million in 2024.
Bon Secours Mercy Health, a 50-hospital not-for-profit health system in seven states, also saw its Medicaid revenue jump — from $1.7 billion in 2023 to $1.9 billion in 2024. However, charity care spending also increased at Bon Secours. It rose from $110 million in 2023 to 142 million in 2024.
Similarly, Mercy Health, a 44-hospital not-for-profit based in Missouri, reported Medicaid revenue increased from $759 million in 2023 to $846 million in 2024. Even as its charity care cost increased from $121 million in 2023 to $169 million in 2024.
Although circumstances at individual hospitals and health systems may vary, possible explanations for Medicaid revenue increasing, even as enrollment decreased, could include the growth of state-directed payments (SDPs). Such payments reached a cumulative $110 billion in 2024, up from $69 billion in 2023, according to the Medicaid and CHIP Payment and Access Commission.
Congressional Republicans reportedly also are considering reduction in SDPs by reducing the provider taxes that help fund them.
The increase in charity spending may stem from some uninsured previously covered by Medicaid before the unwinding, but it also may stem from the surge in illegal immigration that occurred under the Biden administration, according to a CBO analysis.
