After steep gains since 2020, state Medicaid agencies expect Medicaid enrollment to begin to decline in FY 2023, following the expiration of the COVID-19 public health emergency (PHE), which most states assumed would occur during FY 2023, according to KFF’s new state Medicaid budget survey.
Projections of declining enrollment tied to the end of the federal continuous enrollment requirement are also expected to translate into slower total Medicaid spending growth in FY 2023. At the same time, the loss of temporary pandemic-era enhanced federal matching funding is expected to result in a rebalancing of the mix of federal and state spending, increasing state spending even though total Medicaid spending growth is expected to slow. Medicaid officials reported that uncertainty related to the end of the PHE makes it difficult for states to plan for unwinding of the PHE and to develop state budgets.
The 22nd annual survey of state Medicaid directors finds that states expect growth in Medicaid enrollment to slow to 8.4 percent in FY 2022 (down from 11.2 percent the previous year) before declining by 0.4 percent in FY 2023.
Enrollment declines are likely to accelerate over time, as many states anticipated the public health emergency and continuous coverage requirement to run until the end of this calendar year, midway through fiscal year 2023 for most states. The Biden Administration recently announced that the PHE will go until mid-January, and has promised to give states 60 days notice before ending the emergency declaration.
The survey also finds that total Medicaid spending growth – federal and state spending combined – is expected to peak at 12.5 percent in FY 2022, before slowing to 4.2 percent in FY 2023. State Medicaid officials reported that the state (nonfederal) share of Medicaid spending grew by 9.9 percent in FY 2022. They projected sharper state spending growth of 16.3 percent in FY 2023 with the federal government expected to end its temporary enhanced funding.
In addition to enrollment growth, other drivers of increased Medicaid spending reported by state Medicaid agencies included inflationary pressures, increased service utilization, and increased home and community-based services (HCBS) spending.
The survey, conducted by analysts at KFF and Health Management Associates, provides an annual look at Medicaid enrollment and spending trends, currently for state fiscal years 2022 and 2023. Forty-nine states responded to the survey, although response rates for specific questions varied. A companion survey report offers an in-depth, state-specific examination of policies in place in state Medicaid programs, as well important changes and initiatives taking place around the country.
While states continue to respond to pandemic-related health issues such as increasing vaccination and booster rates and treating long-COVID, states also reported actions to focus on longstanding issues and new priorities including improving equity and reducing health disparities, maintaining access to telehealth, improving behavioral health access and supports, and addressing workforce challenges.
Some notable findings from the report include:
The survey is to be discussed today at Noon ET during a web briefing held by KFF with the National Association of Medicaid Directors. The two new reports released today in advance of the briefing are:
For more data and analyses about Medicaid, visit kff.org.