During the COVID-19 pandemic period, the U.S. federal government authorized a temporary increase in the amount of funding that states could receive for medical assistance, provided the state kept nearly all current Medicaid patients enrolled in coverage throughout the pandemic.1 That condition expired at the end of March 2023, when states could begin to terminate coverage for patients who no longer met eligibility requirements for Medicaid. Several states began reviewing eligibility and started terminations of coverage in April 2023, but states have until the end of March 2024 to resume to normal eligibility conditions.1
A study published by KFF found that, prior to the pandemic, 65% of patients whose Medicaid coverage ended did not have insurance coverage in the following year. Lack of insurance coverage could result in expensive medical bills for patients who are required to pay for their healthcare out of pocket.2 To understand how coverage trends have changed since Medicaid terminations started again in April 2023, we analyzed 34 million hospitalizations, 340 million primary care encounters, and 146 million ED encounters that occurred between January 2017 and August 2023 to determine the proportion of self-pay encounters by the month Medicaid coverage terminations started in each state.
We measured how much the percentage of self-pay encounters deviated from the percentage of self-pay encounters that occurred in August 2022 for each encounter type, as seen in Figure 1. Across all three encounter types, states that ended continuous enrollment in April 2023 have had the greatest increase in self-pay visits in August 2023 compared to August 2022. States that ended continuous enrollment in May or June 2023 have had similar shifts in their self-pay trends. States that ended in July or later are starting to show early indications of an increased proportion of self-pay encounters across all three encounter types studied. If the current trend continues, the proportion of self-pay covered encounters will rise for all three encounter types.
To further understand how Medicaid terminations may be influencing trends in insurance coverage, we measured the monthly rates of encounters covered by either Medicaid or by another insurer compared to self-pay from January 2017 to August 2023.
The proportion of ED encounters with Medicaid coverage decreased by 4.4 percentage points between January 2017 and March 2023 from around 25% to 21%. The proportion of ED encounters with Medicaid coverage decreased by 2.8 percentage points from March 2023 to August 2023. We also saw an increase of 2.4 percentage points for self-pay and 0.3 percentage points for commercial/other ED encounters from March 2023 to August 2023, which suggests that most of the Medicaid ED volume transitioned to self-pay.
The proportion of hospitalizations with Medicaid coverage has trended downward by 6.2 percentage points from 23% of hospitalizations in 2017 to less than 18% in March 2023. Between March and August of 2023, the proportion dropped an additional 2.7 percentage points. This coincided with a 1.5 percentage point rise in the proportion of self-pay hospitalizations and a 1.2 percentage point increase in commercial/other coverage.
We found that for primary care, the proportion of encounters with Medicaid insurance has largely stayed between 14 and 15% since 2017 with a small spike to 16% at the start of the pandemic. The proportion of self-pay primary care encounters increased slightly over time to about 2% in 2019, where it remained until March 2023. The proportion of self-pay encounters increased by 0.6 percentage points between March 2023 and August 2023. Commercial/other insurance-covered encounters make up the other 0.5 percentage point difference since the end of continuous enrollment for Medicaid.
