From the spring of 2020 to March 2023, Medicaid gained approximately 20 million new members, thanks in large part to the provision for continuous enrollment during the pandemic. Once Medicaid eligibility redeterminations were officially back in play in April 2023, states were allowed to begin the process of disenrolling beneficiaries who failed to meet their program’s income requirements.

Now we’re seeing Medicaid enrollment plummet for the first time in years, while public health exchange plan enrollment is on the upswing. What do these shifts mean for providers, manufacturers, payers and health IT vendors? Let’s take a look at the data from MMIT’s Directory of Health Plans, which recently released its Q3 2023 update for enrollment tallies across all lines of business.

Declining Medicaid HMO and Medicaid FFS Membership

Since Q4 2022, enrollment in Medicaid HMO plans has seen a decrease of nearly 5 million members. In Q3 2023 alone, managed Medicaid enrollment decreased by more than 2.8 million members since the previous quarter. As states continue the redetermination process, these numbers are expected to continue an overall decline throughout the next year. Many states got a late start on disenrollment, and some did not begin until FY 2024.

Membership in Medicaid fee-for-service (FFS) programs also fell sharply in Q3, losing more than 955,000 beneficiaries since the second quarter. Due to states’ reporting delays, this segment is likely to see lags in their membership decreases. States losing the most membership in their FFS programs were Massachusetts (372,000), North Carolina (214,000) and Arkansas (148,000).

As Medicaid data is highly state-specific, however, some states’ Medicaid HMO or FFS enrollment may actually increase this year due to various factors, including legislative changes and changes in how benefits and eligibility are structured. Some states, like NC, are expanding or planning to expand their Medicaid program in 2024, which will lead to hundreds of thousands of new Medicaid beneficiaries.

Uptick in Health Exchange Membership

As predicted, the public health insurance exchange market has scooped up many disenrolled Medicaid beneficiaries, adding more than 851,000 new members in Q3 2023. This market may see additional increases in Q4 2023 as plans continue to pick up individuals who have been disenrolled from Medicaid.

Some insurers, like Centene Corporation, have experienced tremendous success welcoming former Medicaid members into their health exchange plans. While Centene lost nearly 489,000 Medicaid members since the second quarter, it gained nearly 380,000 health exchange members, primarily in Texas, Florida and New York. Aetna also continues to gain marketplace members, increasing membership by nearly 122,000 in Q3, while Cigna Corporation added 77,000 public exchange members.

Slight Decline in Commercial Plan Membership

Somewhat surprisingly, enrollment in commercial group risk plans—employer-based group or off-exchange individual health plans—has decreased slightly since the second quarter, dropping nearly 45,000 members. Enrollment in administrative services only (ASO) and self-funded plans also decreased by 93,000 members in Q3 2023.

So far, these market segments don’t seem to be affected by disenrolled Medicaid beneficiaries, but that could change due to the lag between when employees gain insurance and when they appear on enrollment files. Of course, some former Medicaid members may opt to remain uninsured—especially if their employer coverage is deemed inadequate or too expensive.

Notable changes in the commercial market include Humana, which is winding down all of its commercial plans through 2024 to focus on government-funded programs and specialty businesses. Humana lost 66,200 group risk members and nearly 115,000 ASO members.  Kaiser Foundation Health Plan also continues to lose commercial risk group members, dropping 30,000 members in Q3 following a second-quarter loss of 39,000 members. On the upside, UnitedHealthcare made gains in both its ASO/self-funded and commercial risk group plans since the second quarter, adding 80,000 and 33,000 members respectively.

Resolving Access Barriers and Identifying Growth Opportunities

For providers, manufacturers, and health IT vendors, understanding how these enrollment shifts will affect patient access is critical. Hospitals, health systems and physicians must stay on top of which therapies are covered by their patients’ plans and make policy and process changes accordingly. A therapy covered by Medicaid may not be covered by commercial plans, or may be covered with stringent restrictions by a predominant health exchange plan. What provisions do you have in place to help these patients continue their treatment or embark on a new course of therapy?

Manufacturers also need to monitor large-scale enrollment shifts to determine access issues for their patient populations. Which channels are your patients moving into, and why? Are the majority of your patients moving from Medicaid to a health exchange or commercial plan, or are there large regional variations? Anticipating the access barriers your patients are likely to face this year—from inadequate coverage to the inability to schedule specialist appointments—is key to maintaining or improving the utilization of your therapy.

For health IT vendors, understanding enrollment shifts is also essential for identifying potential growth areas for your clients. Market fluctuations must be monitored at the insurer level—not just the state level—to ensure that there are no missed opportunities. As different insurance channels have different coverage and network implications, it’s important to know exactly where members are in order to target the right markets.

To track enrollment trends and payer affiliations, subscribe to MMIT’s Directory of Health Plans.

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