National enrollments nosedive as North Carolina expands Medicaid

(The Center Square) – As North Carolina prepares to expand Medicaid to 600,000 residents on Dec. 1, a nonpartisan health policy research group is forecasting a nosedive in national enrollments next year.

The Kaiser Family Foundation – an independent nonprofit research, polling and journalism entity – released new analysis this week that’s projecting steep enrollment declines and rising state spending on the government insurance program as pandemic policies expire.

Federal Medicaid rules that prohibited states from removing members without losing increased pandemic funding added 23 million people to the program in recent years, while the enhanced federal funding cut state spending on Medicaid to prepandemic levels. The continuous enrollment provision expired in April, and states are now working through eligibility redeterminations, a process known as “unwinding.”

A new foundation survey of Medicaid directors in 48 states and Washington, D.C., released this week forecasts an 8.6% decline in enrollments nationally for the 2024 fiscal year, the largest annual decline since the foundation began collecting data in 1998.

“These estimates reflect a dramatic year-over-year decline in program enrollment after reaching record highs during the continuous enrollment period,” Liz Williams, the foundation’s senior policy analyst, said during a Tuesday webinar.

In North Carolina, the redeterminations have resulted in 129,091 removed from Medicaid through September, while just over 1 million have been renewed, according to the North Carolina Department of Health and Human Services’ Medicaid Continuous Coverage Unwinding Dashboard.

State officials expect about 600,000 North Carolinians to be eligible for Medicaid when expansion happens in two weeks, with about 300,000 automatically enrolled.

As states work through the eligibility determinations, the federal government is phasing out enhanced pandemic funding for the program through December. The foundation points to data from the National Association of State Budget Officers that shows Medicaid comprised 27% of total state spending for all budget items in 2021.

State Medicaid directors are expecting the loss of federal funds will grow state spending on Medicaid by 17.2% in fiscal year 2024, or about 4.2% faster than in fiscal year 2023. Total Medicaid spending, including both state and federal funds, is projected to decline to a 3.2% increase in FY2024, down from an 8.3% jump in FY2023.

Factors that will impact spending include enrollments, provider rates, and revenue collections.

“Considerable uncertainty remains … as to how Medicaid enrollment will change as ‘unwinding’ continues and how those enrollment changes, along with the enhanced (pandemic funding) phase-down, will impact Medicaid spending,” according to the foundation analysis.

In North Carolina, the budget approved by lawmakers in September includes $220 million in recurring funds to increase Medicaid reimbursement rates for providers of mental health, substance use disorder, and intellectual and developmental disability-related services.

Those rate increases are set to take effect on Jan. 1.