Data Note: Growth in Medicaid MCO Enrollment during the COVID-19 Pandemic

This data note looks at state Medicaid managed care enrollment data from March 2019 and March 2020 as well as managed care enrollment data obtained from state websites for April and May 2020, to help begin to assess the impact of the COVID-19 pandemic and economic crisis on Medicaid enrollment. At the start of FY 2020, states anticipated relatively flat Medicaid enrollment growth. States attributed flat enrollment projections primarily to a robust economy. States also pointed to changes in renewal processes, new functionality of upgraded eligibility systems, and enhanced verifications and data matching efforts as contributing to enrollment declines. However, the economic implications from the coronavirus pandemic are stark with unemployment rates up and state revenues down. During economic downturns, more people typically become eligible and enrolled in Medicaid, as individuals lose employment and income, and that will be true to even greater extent with eligibility expanded under the Affordable Care Act (which 37 states plus the District of Columbia have adopted).

Why is recent state MCO enrollment data an important indicator? Because there is a lag in reporting Medicaid enrollment data by the Centers for Medicare and Medicaid Services (CMS), to date it has been difficult to gauge or assess the impact of the coronavirus pandemic and economic downturn on Medicaid enrollment. Our KFF Medicaid Managed Care Tracker tracks Medicaid enrollment in comprehensive Medicaid managed care organizations (MCOs) for all states that make these data publicly available. These data are updated in our tracker annually with March enrollment data. These data are informative as more than two-thirds of beneficiaries nationally receive most or all of their care through risk-based MCOs and more than half of states that contract with MCOs enroll 75% or more of their Medicaid beneficiaries in MCOs. Children and nonelderly adults are groups more likely to be affected by changes in the economy and are also more likely to be enrolled in Medicaid MCOs. Increased enrollment in MCOs is directly tied to spending without immediate regard to utilization of care – which has generally decreased during the pandemic for non-urgent care – since states make upfront capitation payments to MCOs to provide access to a range of services. Thus, analyzing growth in Medicaid MCO enrollment specifically is valuable beyond signaling broader trends in Medicaid enrollment.

What were the trends prior to the pandemic? Data show that prior to the pandemic there was an aggregate enrollment decline among reporting states. Specifically, among the 25 states reporting data (of the 39 that contract with MCOs), there was an aggregate decline of 1.0% between March 2019 and March 2020. The median change was essentially flat, showing a 0.7% increase. In 2018, these states accounted for over 80% of the total share of enrollment in Medicaid MCOs nationally.

What are the more recent trends? The negative growth from March 2019 to March 2020 appears to reverse between March 2020 and May 2020, coinciding with the outbreak of the COVID-19 pandemic. Among the 16 states reporting data for this period, all states reported growth with an aggregate enrollment increase of 3.6 percent. (Table 1). The median growth rate was 4.7%. In 2018, these states accounted for over 50% of the total share of enrollment in Medicaid MCOs nationally. Two-month cumulative growth rates across states range from 0.8% (Tennessee) to 14.3% (Nevada) (Figure 1). While we cannot explain what is specifically driving the near-term growth in enrollment and differences in growth rates across states, rising unemployment (and loss of ESI) as well as the “maintenance of eligibility” (MOE) requirements tied to a 6.2 percentage point increase in the federal match rate (FMAP) authorized by the Families First Coronavirus Response Act (FFCRA) – which prevents states from disenrolling Medicaid beneficiaries if they accept the additional federal funding — are likely contributing to enrollment increases/growth across states. Some states have experienced/are experiencing significant growth in unemployment including Nevada – a state with an unemployment rate of 25.3% in May 2020, a 18.5 percentage point increase over March 2020. There is often a lag between changes in unemployment and Medicaid enrollment. Based on current unemployment trends we would expect increases in Medicaid enrollment to follow. Nearly all states with early projections anticipated that enrollment growth would accelerate in state fiscal year 2021.

Figure 1: Percent Growth in Medicaid MCO Enrollment: March 2020 – May 2020

What should we watch going forward? These growth rates signal Medicaid enrollment is increasing beyond projected flat enrollment that was expected through FY 2020, likely as a result of the COVID-19 pandemic and resulting economic downturn. Once CMS makes national Medicaid enrollment data available for April and May 2020 (data usually lags three months, so April data is expected in late July), a more comprehensive analysis can be performed. In the meantime, however, using Medicaid MCO enrollment data for available states may provide preliminary information about the direction and magnitude of the expected changes. The temporary increase in Medicaid FMAP authorized by the FFCRA provides some fiscal relief to states but the duration of that relief is tied to the end of the public health emergency and is uncertain. In addition, expected enrollment growth may require much of that relief, leaving little available for general fiscal relief which will leave states with difficult choices to meet balanced budget requirements. Congress may consider additional funding for states through Medicaid as part of broader efforts to address the pandemic and the related economic effects of the pandemic.

Table 1: Change in MCO Enrollment, March 2019-May 2020
State March 2019 MCO Enrollment March 2020 MCO Enrollment % Change: March 2019-March 2020 April 2020 MCO Enrollment May 2020 MCO Enrollment % Change: March 2020-May 2020
Overall 25 States Reporting 25 States Reporting -1.0% 19 States Reporting 16 States Reporting 3.6%*
Arizona 1,514,431 1,517,228 0.2% 1,555,826 1,589,668 4.8%
California 10,550,171 10,150,266 -3.8% 10,189,870 10,301,184 1.5%
Colorado 110,965 121,435 9.4% NR NR
Florida 2,975,428 2,906,434 -2.3% NR NR
Georgia 1,360,907 1,387,641 2.0% 1,387,641 1,473,107 6.2%
Illinois 2,144,696 2,197,501 2.5% 2,219,847 NR
Indiana 1,078,209 1,116,114 3.5% NR NR
Iowa 562,432 578,226 2.8% 590,710 NR
Kentucky 1,233,360 1,195,787 -3.0% 1,240,109 1,258,970 5.3%
Maryland 1,197,481 1,205,799 0.7% NR NR
Michigan 1,760,122 1,772,762 0.7% 1,789,916 NR
Minnesota 835,528 841,347 0.7% 871,999 904,481 7.5%
Mississippi 437,194 431,523 -1.3% 431,466 436,099 1.1%
Missouri 676,539 549,116 -18.8% 573,113 605,800 10.3%
Nevada 466,227 434,252 -6.9% 483,642 496,207 14.3%
New Mexico 660,646 674,343 2.1% 685,609 697,549 3.4%
New York 4,344,939 4,210,483 -3.1% 4,275,338 4,388,700 4.2%
Oregon 853,185 898,749 5.3% 915,848 944,127 5.0%
Pennsylvania 2,274,092 2,235,532 -1.7% NR NR
South Carolina 794,184 788,253 -0.7% 789,519 825,134 4.7%
Tennessee 1,389,600 1,421,145 2.3% 1,414,948 1,431,885 0.8%
Texas 3,688,147 3,614,486 -2.0% NR NR
Washington 1,332,557 1,530,042 14.8% 1,546,863 1,564,966 2.3%
West Virginia 390,546 402,303 3.0% 411,308 419,623 4.3%
Wisconsin 756,650 766,477 1.3% 802,544 833,253 8.7%
NOTES: “NR” – Not Reported. *Among states reporting enrollment for March 2020 and May 2020. Methodology for reporting enrollment data varies across states: some states report point in time (PIT) counts while other states report monthly averages.
SOURCES: KFF analysis of state Medicaid managed care enrollment reports.