Digital behavioral health services such as mental health apps became increasingly popular especially during the pandemic, according to industry reports, when in-person health care visits were avoided to prevent the spread of COVID-19. Approximately 40% of Americans reported symptoms of depression and anxiety at the beginning of the pandemic, and there was an increased need for mental health support for consumers to address these symptoms. Additionally, industry reports found that funding of behavioral health startup companies exploded during the pandemic with $588 million invested in the first half of 2020, many funded by private equity firms.

During the PHE, many federal and state healthcare requirements were “waived” in an attempt to expand access to digital behavioral health services such as mental health apps. This Issue Brief looks at how federal PHE waivers may have expanded use of mental health apps and some of the policy issues concerning the continued use and promotion of mental health apps post-PHE.

What Are Mental Health Apps?

Mental health apps are mobile technology applications that offer clinical and non-clinical methods of offering mental health support. These vary in the scope of services they offer to consumers, from clinical services offered by a licensed behavioral health provider to treat specific conditions to services aimed at promoting general health and wellness. Users typically download an app through an app store available on smartphones and are then prompted to review and agree to an app’s privacy and technology policies prior to accessing other features on the app (e.g., intake questionnaires on symptoms and personalized treatment plans). The spectrum of available apps includes the following, with some apps including a combination of these features:

• Medical Devices: Apps defined as computerized behavioral therapy devices subject to approval by the FDA (e.g., ReSET) offer a clinician-administered version of virtual behavioral therapy that patients can utilize outside of synchronous, live sessions with their provider. These apps can be found on smartphone devices, although they may be difficult or nearly impossible to utilize without a prescription.
• Mental health apps that include telehealth features: Some apps such as TalkSpace and multi-service platforms such as Lyra offer therapy sessions with a licensed provider via live video or audio communications. Telehealth apps can also offer patients means to receive consultations and prescription drugs with a provider licensed to prescribe psychiatric medications. Telehealth apps might also include other general wellness features and are typically accessible through app stores on smartphone devices.
• Mental health “wellness” products: Other apps (e.g., Happify | Get Started, PTSD Coach App) assist consumers with general wellness (e.g., stress relief) via use of journaling tools, motivational quotes, chatbot therapy, or meditation exercises, as well as offer non-medical treatments to assist consumers in managing symptoms associated with a specific mental health condition. Some of these apps may be developed by licensed providers and offer clinician-endorsed treatments, but the line between what is actual medical care and what is non-medical care is not always clear. There are a number of general wellness apps that claim to offer medical strategies to help with certain mental health disorders, but the apps themselves might not offer treatments based on evidence. One study from 2017 found that none of the most popular apps rated highly by consumers for treating anxiety related symptoms were evidence-based treatments. On the other hand, some apps contain mental health tools and practices that have been developed or supported by licensed providers. Even these apps might contain disclaimers stating that usage of the app does not replace a consumer seeking medical care from a licensed behavioral provider, which makes it difficult for a consumer to determine if they are receiving medical treatment or not via these apps.

A consumer might be introduced to a mental health app in a variety of ways including through their health insurance coverage provider or directly from their employer separate from their health insurance. Employers or health insurers, for instance, might pay a small per member per month fee to a behavioral health vendor to make an app available to their employees, allowing them to receive care or an assessment of their mental health needs. Low or no cost direct-to-consumer options are also widely available and are often marketed to younger audiences via social media.

Federal COVID Waivers Drive Change in Guidance on Mental Health Apps

During the pandemic, federal agencies suspended some policies to increase access to digital behavioral health services. This may have facilitated the use of mental health apps as a vehicle to access these services. Multiple federal COVID waivers have played a role alongside state law changes that temporarily allowed health care providers to practice across state lines (specifically, allowing a provider in one state to provide telehealth to a patient in another state). Temporary changes in Medicare and Medicaid required coverage for telehealth services. These changes may have also resulted in more utilization of telehealth delivered through mental health apps across the health system, as more providers expanded their capabilities to provide telehealth for all of their patients, regardless of whether the patient had public or private health insurance coverage. Some flexibilities for Medicare have been made permanent through federal legislation and regulation or extended past the end of the PHE on May 11, 2023, while some states have made telehealth flexibilities permanent for those with Medicaid coverage.

For the private sector, waivers focused on promoting the use of telehealth in high deductible health plans (HDHP) and offering “stand alone” telehealth may have played a role to encourage the use of telehealth delivered via mental health apps. The Coronavirus, Aid, Relief, and Economic Security Act (CARES) allowed coverage of telehealth services before the deductible is met for Health Savings Account (HSA) qualifying HDHPs. Congress extended this pre-deductible coverage of HSA telehealth services under the Consolidated Appropriations Act of 2023 until December 2024. Additionally, in FAQ guidance (Q14), the federal government allowed large employers (generally those with 50 or more employees) to offer “stand-alone” telehealth coverage to employees without having to meet certain Affordable Care Act (ACA) and Employee Retirement Income Security Act of 1974 (ERISA) legal requirements for the duration of the PHE. This was available to employees who are not eligible for benefits under their employer’s health plan and continues until the end of the employer’s current plan year (for example, until December 31, 2023 for a calendar year plan).

Other federal waivers also may have created incentives for the use of mental health apps among consumers and providers:

• Privacy and security protections for telehealth and other remote communications. Prior to the pandemic, health care providers were required to ensure that audio-video technology utilized during telehealth sessions and any third-party apps administered by a clinician for treatment or communication purposes were HIPAA-compliant. In 2020, the US Department of Health and Human Services exercised its enforcement discretion by allowing providers to utilize audio and video technology without facing penalties for non-compliance with HIPAA’s privacy and security standards. Suspending these requirements gave providers a wider range of telecommunication tools to choose from, including use of popular apps such as Apple’s Facetime to conduct telehealth visits as well as wellness coaching.
• FDA protocols for approving computerized behavioral therapy devices. Prior to the pandemic, the FDA required developers of these devices to meet certain requirements to show that the device was safe, effective, and comparable with other products on the market. All of these requirements were loosened during the PHE and will be reinstated in November 2023. Even before the pandemic, the FDA took a less active role in regulating general wellness devices or software that may be classified as a medical device but that the FDA determined pose a low risk to consumers. In addition, due to changes in the law in 2016, the FDA’s authority to assess patient safety risks for some of these products was limited. As a result, these products did not and will not for the foreseeable future have to abide by FDA requirements post-PHE.
• Standards for prescribing of controlled substances via telehealth. Prior to the PHE, federal law generally required providers to have an in-person medical evaluation before a prescription for controlled substances was given. This includes, for example, certain medications used to treat Attention Deficit Hyperactivity Disorder (ADHD) such as Adderall, as well as buprenorphine used to treat opioid use disorder. Many of these standards were waived during the PHE by the Drug Enforcement Administration (DEA), an agency that is part of the U.S. Department of Justice, allowing providers to use telehealth (video or audio only mechanisms) to prescribe these medications, including through telehealth apps.

What to Watch Now That the PHE is Over

Before the PHE ended on May 11, some stakeholders and consumers expressed interest in making some waivers permanent, and efforts are underway to extend some of these waivers so that patients can continue to easily use digital behavioral health tools often employed via use of mental health apps permanently, or at least until the impact of the PHE waiver is evaluated. The end of the PHE now shifts the policy focus in digital health solutions to, in some cases, extending the COVID waiver policy in some areas, and in other areas has brought new government scrutiny on health policy concerns such as privacy and security of mental health apps and access to prescription drugs via telehealth.

Employer Plan Telehealth Flexibilities

Promoting easier access through virtual behavioral health was seen early on in the pandemic as a way to not only prevent the spread of COVID, but also address growing behavioral health care needs for those with employer coverage. There are proposals to make pre-deductible coverage of telehealth services for HDHPs used in conjunction with health savings accounts permanent. For example, the Telehealth Expansion Act, was introduced this year. Also, some members of Congress have proposed making stand-alone telehealth coverage permanent, allowing employers to make it available to all employees (including those eligible for their employer’s health plan) in the Telehealth Benefit Expansion for Workers Act, largely exempting the coverage from regulatory oversight. Going forward stakeholders will likely address ways to expand access to virtual behavioral health beyond just those with health savings accounts, and address design alternatives for employer coverage that incorporate telehealth as just one part of a broader set of tools to enhance coverage for the continuum of behavioral health care.

Access to Controlled Medications

The PHE changes gave patients easier access to psychiatric medications via prescribing through telehealth. However, more unrestricted access may have contributed to a shortage in prescription drugs such as Adderall. The percentage of stimulants prescribed via telehealth rose from less than two percent prior to the pandemic, up to 40% in 2022. Originally, the DEA proposed in two separate regulations reinstating some protocols for controlled substances, including mandating an in-person visit, in certain circumstances before a provider can give prescriptions. Although some speculate this might help resolve the shortage issue, reinstating this requirement could have potentially caused gaps in coverage for people who receive medication via telehealth platforms due to geographic restrictions, provider shortages, or other barriers that might prevent them from seeking in-person care. Just before the end of the PHE, the DEA issued a temporary rule that will allow virtual prescribing of controlled substances to continue until November 2024, giving providers and consumers time to adjust and regulators a chance to evaluate policy options.

Privacy Risks

Licensed providers and health plans who want to continue to use telehealth delivered via mental health apps after the PHE ends are expected to use telecommunication technology that meets HIPAA specifications. There is no checklist for what defines “HIPAA compliant technology”, however, HIPAA-covered entities are required to conduct a risk assessment of their telecommunication platforms and ensure that key risks are addressed. Some examples of the types of security protections they might address in their risk assessment include encryptions used to protect patients’ personal health data, login requirements, and verification processes used to ensure only verified users have access to the platform. Recent guidance gave providers an additional 90 days after the end of the PHE (August 9, 2023) to comply. Even with these HIPAA protections, there are growing concerns that mental health apps are being used to access sensitive health information that is then provided or sold to third parties for marketing purposes. HHS recently issued a Bulletin on guidelines HIPAA covered entities must follow when using online tracking technology. Additionally, HHS is currently investigating Cerebral, a mental health platform that offers online therapy and assessments, for selling patient data to third party advertisers via use of online tracking technologies.

HIPAA’s guidance and HHS’ enforcement powers only reach so far when it comes to mental health apps. Unless the entity offering a mental health app is considered a HIPAA-covered entity (typically a health provider, plan or insurer) or is a business associate of one of these entities, mental health apps do not have to follow federal HIPAA privacy, security and breach notice rules. HIPAA generally does not cover general wellness apps or even apps that are considered medical devices if they are not connected with a HIPAA-covered entity. Outside of HIPAA, app users’ data are often at the mercy of an app’s privacy policies, which could be written in convoluted language that a consumer may find difficult to understand or are not read by consumers at all.

Although non-HIPAA covered apps and telehealth vendors that misrepresent or do not abide by their privacy policies or mishandle patient data would not face penalties under HIPAA’s guidelines, they could face legal repercussions from the Federal Trade Commission (FTC), a federal agency that enforces federal laws that prohibit “unfair and deceptive” practices that affect commerce and oversee certain consumer protection laws. The FTC has recently announced new enforcement activity related to mishandling of patient data. For example, BetterHelp (a subsidiary of Teledoc), a popular mental health app, will have to pay $7.8 million in restitution as a result of allegedly selling patient data to third party advertisers without their permission and misrepresenting their privacy practices. Additionally, the FTC has proposed to update the Health Breach Notification Rule, which would require organizations that manage digital health apps and consumers’ personal records to inform consumers and the FTC when their personal data has been compromised. This proposal is controversial, as the FTC has claimed that it has authority to regulate all health apps that are not covered by HIPAA.

Congress is also weighing in on how data is used within mental health apps. Several senators have questioned leaders of major telehealth companies on their data sharing practices and some have introduced the Upholding Protections for Health and Online Location Data (UPHOLD) Privacy Act that would increase protection of personal health data stored in apps.

Looking Forward

Mental health apps, as well as other digital health solutions, have the potential to expand access to care, and for this reason certain rules and standards were waived or modified during the pandemic, which was also a time of heightened mental health needs. Coming out of the urgency of the pandemic, there is now an opportunity to evaluate the benefits and risks of these tools and consider what oversight might be appropriate. We can expect much more attention focused on the quality and clinical effectiveness of these tools, as well as who will pay for them. 

A new KFF analysis finds that states received over $117 billion in enhanced federal Medicaid funding in exchange for pausing disenrollments during the first three years of the pandemic. The injection of federal money enabled states to spend less of their own funds on Medicaid even as enrollment rose by more than 23 million people nationally and total Medicaid spending increased by billions of dollars.

Pandemic-era enrollment protections expired in March, and in April states were permitted to resume disenrollments of people who are no longer eligible for Medicaid or who do not complete the eligibility renewal process.

As the enhanced federal funding is phased out and ultimately eliminated next year, states’ spending on Medicaid will likely increase — though the impact will vary by state. The size of the increase in state Medicaid spending will depend largely on changes in total spending growth, which in turn reflect how quickly people are disenrolled, how many new people come on to Medicaid, and how spending per person in the Medicaid program will change.

States that have not adopted Medicaid expansion under the Affordable Care Act received a disproportionately large share of the more than $117 billion in enhanced federal funds that was disbursed when enrollment protections were in effect. That’s because the extra funding came in the form of enhanced federal matching money that did not apply to spending on Medicaid enrollees who were made eligible for the program through the ACA expansion. Non-expansion states received 27 percent of the enhanced funding despite accounting for only 22 percent of all Medicaid spending, the analysis finds. The full analysis, “Fiscal Implications for Medicaid of Enhanced Federal Funding and Continuous Enrollment,” includes data showing how much each state received in enhanced federal funding from January 2020 through March 2023.

Related resources:

Medicaid Enrollment and Unwinding Tracker

How Many People Might Lose Medicaid When States Unwind Continuous Enrollment?

10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision

For a three-year period, states provided continuous enrollment in Medicaid in exchange for an increase in the percentage of Medicaid spending that is paid for by the federal government (the Federal Medical Assistance Percentage or “FMAP”). A recent KFF analysis estimated that over 23 million people gained Medicaid coverage during the continuous enrollment period. Beginning April 1, 2023, states could begin disenrolling individuals from Medicaid, but phased-down federal matching funds will be available through the end of the year if states comply with certain rules. While there remains a great deal of uncertainty as to how Medicaid enrollment will change during the unwinding, the end of the Medicaid continuous enrollment provision and enhanced FMAP are expected to have a significant impact on Medicaid enrollment and spending. This brief examines how Medicaid spending changed during the continuous enrollment period and estimates the amount of enhanced federal funding states received during the continuous enrollment period. Key findings include:

• State spending dipped below pre-pandemic levels even as Medicaid enrollment increased by 23 million during the continuous enrollment period. With the substantial enrollment growth, total spending increased, including significant increases in federal Medicaid spending due to the enhanced FMAP.
• We estimate states received over $117 billion from the increased FMAP during the continuous enrollment period, with enhanced federal funds comprising a larger share of total Medicaid spending in states that had not adopted Medicaid expansion through the Affordable Care Act (ACA).
• Although the magnitude is uncertain, significant decreases in Medicaid enrollment are expected during the unwinding of the continuous enrollment provision, which will result in lower Medicaid spending. Even with lower enrollment, state spending will likely increase as the enhanced FMAP expires.
• The phase down of the enhanced FMAP was designed to provide continued financial support to states during the unwinding process and to mitigate sharp increases in state Medicaid spending. How much state Medicaid spending increases as the enhanced FMAP phases down and is ultimately eliminated next year will depend on how many and how quickly people are disenrolled, how many new people come on to Medicaid, and how spending per person in the Medicaid program will change.

What was the purpose of the enhanced federal Medicaid match rate?

States received a 6.2 percentage point FMAP increase in exchange for keeping individuals continuously enrolled during the pandemic as authorized by the Families First Coronavirus Response Act (FFCRA). The increased FMAP was retroactive to January 1, 2020 and generally applied to Medicaid spending that would otherwise reimbursed at the state’s regular FMAP. The enhanced federal matching funds do not apply to administrative expenses or to Medicaid spending that is already subject to an increased match, including spending for ACA expansion adults (the FMAP is 90% for adults eligible through expansion). The Consolidated Appropriations Act, 2023 (CAA) delinked the continuous enrollment provision from the public health emergency (PHE), ending continuous enrollment on March 31, 2023. The CAA also phases down the enhanced federal Medicaid matching funds through December 2023, with the increased FMAP decreasing to 5 percentage points from April to June 2023, 2.5 percentage points from June to September 2023, and 1.5 percentage points from October to December 2023.

The federal funding from the enhanced FMAP was designed to support the costs of increased Medicaid enrollment and provide fiscal relief to states beyond the costs of enrollment growth. During economic downturns, enrollment in Medicaid grows, increasing state Medicaid costs while state tax revenues are declining. Congress enacted legislation to temporarily increase the federal share of Medicaid during the last two economic downturns prior to the pandemic. At the onset of the COVID-19 pandemic, states were projecting large revenue declines, but the enhanced FMAP provided new federal funding to states quickly by using an existing federal funding mechanism. Enhanced federal funding supported state Medicaid programs and helped free up state funds for other purposes including mitigating the need for widespread spending cuts on other services and filling gaps in state budget shortfalls.

How did Medicaid spending change during the pandemic?

State spending on Medicaid dipped below pre-pandemic levels even as enrollment in Medicaid increased by 23 million during the continuous enrollment period (Figure 1). The reduction in state spending reflected a sharp drop from $231 billion in 2019 to $214 billion in FY 2020, accompanied by an increase in federal spending of nearly $50 billion (from $393 billion to $444 billion). After 2020, state spending remained relatively stable while federal spending continued to increase due to the enhanced FMAP and total spending increased in conjunction with rising enrollment. State spending remained below 2019 levels in both expansion (defined as those having implemented Medicaid expansion as of 10/1/2021) and non-expansion states through the end of FY 2022. In the first six months of FY 2023—before the end of the continuous enrollment provision—we find that total and federal spending continued to increase while state spending returned to levels similar to the first two quarters of 2019. We expect spending and enrollment levels for the second half of 2023 to change, reflecting the end of the continuous enrollment period.

How much did states receive in enhanced federal funding during the continuous enrollment period?

During the continuous enrollment period, we estimate that states received over $117 billion in funding from the increased FMAP, with non-expansion states receiving a disproportionate share (Figure 2 and Appendix Table 1). Non-expansion states received 27% of the enhanced funding despite accounting for only 22% of all Medicaid spending because the enhanced FMAP does not apply to spending for people eligible through an ACA expansion. Across all states, the $117 billion in additional funding comprised an estimated 5% of total Medicaid spending and 7% of federal Medicaid spending during the continuous enrollment period (January 2020 through March 2023).

What might happen to Medicaid spending during the unwinding?

Although the size of the effects are quite uncertain, significant decreases in Medicaid enrollment are expected during the 14-month period in which states unwind the continuous enrollment period. KFF estimates that nationally Medicaid enrollment will decrease by 18% (17 million people) between March 2023 and May 2024 (based on a recent survey of states), but in practice, rates of enrollment decline will vary across states, depending on states’ approaches to unwinding. Early data from states shows substantial variation in disenrollment rates. While state Medicaid agencies report enrollment changes as the most significant factor driving changes in total Medicaid spending, they also note that factors such provider payment rate increases were putting upward pressure on spending. Overall, total Medicaid spending could decrease during the unwinding if the effects of enrollment losses are larger than the effects of other factors such as those.

Even with declining enrollment, state spending on Medicaid will likely increase as the enhanced FMAP expires. States are expecting the end of the enhanced FMAP to shift the state and federal spending shares, as has been the case in previous economic downturns when an enhanced FMAP expired. CBO estimates that federal spending will decrease by about 9% from FY 2023 to FY 2024. While states received substantial enhanced federal funding of $117 billion during the continuous enrollment period, they will likely see increases in state Medicaid spending as the enhanced federal matching funds expire at the end of the year.

The phase down of the enhanced FMAP was designed to provide continued financial support to states during the unwinding process and to mitigate sharp increases in state Medicaid spending. Before the CAA delinked the continuous enrollment provision and the enhanced FMAP from the PHE, the enhanced FMAP was set to expire at the end of the quarter when the PHE expired. The gradual phase-out of the FMAP through December 2023 recognizes that it will take states time to unwind the continuous enrollment provision and conduct redeterminations for all Medicaid enrollees. To be eligible for the enhanced match, states must meet certain eligibility, renewal, and reporting requirements. Recently, in a letter to CMS, Democratic lawmakers reiterated these beneficiary protections as well as CMS enforcement tools that were made available in the CAA, and CMS, in a letter to state governors, reiterated that states must comply with federal requirements to continue to draw down enhanced federal funds. The amount of the enhanced funding available to states during the unwinding will be smaller relative to the continuous-enrollment period, but it will still help mitigate the shift in funding from the federal government back to the states. As the enhanced federal funding is phased out and ultimately eliminated, the size of the increase in state Medicaid spending will depend on changes in total spending growth, which in turn will reflect how quickly people are disenrolled, how many new people come on to Medicaid, and how spending per person in the Medicaid program will change. These enrollment and spending changes will vary by state.

Appendix

There has been intense focus on abortion policies across the United States since the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization on June 24, 2022. That decision overturned Roe v. Wade, eliminating federal constitutional protections for abortion and putting the decision to restrict or protect abortion with the states. 

Now, nearly one year later, what is the status of federal and state developments? Where is abortion banned? Where is litigation pending? And how does the public view abortion, the Supreme Court, and related women’s health issues?

These KFF resources provide the latest information:

Abortion in the United States Dashboard: Tracks state abortion policies and litigation following the overturning of Roe v. Wade.

Key Facts on Abortion in the United States: Answers key questions about abortion in the United States.

The Availability and Use of Medication Abortion: Explains medication abortion, how it is used and regulated, the role of the drug in self-managed abortions, and analyzes the intersection of federal and state regulations pertaining to its provision and coverage.

Legal Challenges to State Abortion Bans Since the Dobbs Decision: Summarizes the types of challenges presented in state courts since the Dobbs ruling and highlights some of the novel strategies that are being used to defend access to abortion in states that have enacted abortion bans.

A Review of Exceptions in State Abortions Bans: Implications for the Provision of Abortion Services: Analyzes the rape, incest, and health exceptions to abortion bans and discusses how they may not achieve their purported aims to provide life-saving care.

Health Care in the 2024 Election and in the Courts Polling: Medication Abortion: Examines abortion as a key issue in the 2024 election cycle, awareness of medication abortion’s legality and safety, and confidence in the Supreme Court and the FDA.

Managed care is the dominant delivery system for Medicaid enrollees with 72% of Medicaid beneficiaries nationally enrolled in comprehensive managed care organizations (MCOs). Current federal rules require states to establish and enforce network adequacy standards for Medicaid MCOs, but states have flexibility to define those standards. States use an array of provider network standards (e.g., time and distance, provider-to-enrollee ratios, and appointment wait time) as well as varying methods to monitor access and oversee MCO performance. Recent research findings suggest that provider network directories may overstate Medicaid physician availability and current network adequacy standards may not reflect actual access. It is well documented that provider directories are often outdated or inaccurate. Study findings also suggest care provided to Medicaid enrollees is often highly concentrated among a small number of physicians. Our KFF Survey of Consumer Experiences with Health Insurance revealed adults with Medicaid or Marketplace coverage are more likely than those with Medicare or employer sponsored insurance to report experiencing provider network problems.

On April 27, 2023, the Biden Administration released two notices of proposed rulemaking (NPRMs), Ensuring Access to Medicaid Services (“Access” NPRM”) and Managed Care Access, Finance, and Quality (“Managed Care” NPRM), to help ensure access to quality health care in Medicaid and the Children’s Health Insurance Program (CHIP). Under the Managed Care NPRM, CMS is proposing to establish national maximum wait time standards for certain appointments and to require states to conduct independent secret shopper surveys to validate plan compliance. States would also be required to conduct an annual enrollee experience survey and managed care plan payment analysis for certain services.

This brief describes current network adequacy and availability standards for Medicaid managed care plans, presents related findings from KFF’s 22nd annual Medicaid budget survey (conducted in 2022), and summarizes proposed changes to network adequacy and access rules in the Managed Care NPRM. The 2022 Medicaid budget survey asked states about network access and availability monitoring, network adequacy penalties, and about certain features of state-developed standards. Findings from the survey may provide information and context for provisions included in the Managed Care NPRM. Public comments (for both NPRMs) are due by July 3, 2023. Key findings from our 2022 survey include:

• Monitoring. States are currently using a variety of methods to monitor MCO compliance with network adequacy standards and access requirements including monitoring access-related member surveys (34 of 37 responding MCO states) and conducting secret shopper calls (28 of 37 responding MCO states).
• Penalties. Less than one quarter of responding MCO states (9 of 38) reported issuing monetary or non-monetary penalties (e.g., suspending new enrollment) excluding corrective action plans for non-compliance with MCO contractual network adequacy standards in the past three years.
• Public Transit / Time and Distance Standards. Few states reported state-developed time and distance standards account for enrollees who rely on public transit.
• Telehealth. While many states have not altered network adequacy requirements to account for telehealth, other states reported varying approaches to accounting for telehealth availability within network adequacy standards.
• Cultural Competency. Most MCO states reported they define cultural competency standards for MCO provider networks in their MCO contracts; however, few specifically described how they monitor and ensure compliance with these standards.

What are the current network adequacy and service availability rules for Medicaid managed care plans?

Federal law requires Medicaid managed care plans to assure that they have capacity to serve expected enrollment in their service area and maintain a sufficient number, mix, and geographic distribution of providers. A Medicaid managed care plan must make covered services accessible to its enrollees to the same extent that such services are accessible to other state residents with Medicaid who are not enrolled with that plan.

Network adequacy standards for Medicaid managed care plans differ by state. While federal rules related to availability of services are complex, key requirements for network adequacy (i.e., whether managed care plans contract with a sufficient number of providers to serve enrollees) include the following:

• Current federal rules require states to establish network adequacy standards for specified provider types including primary and specialty care (adult and pediatric), OB/GYN, behavioral health (adult and pediatric), hospital, pharmacy, pediatric dental, and long-term services and supports (LTSS) (as applicable).
• The 2020 CMS Medicaid managed care final rule removed the requirement that states use time and distance standards to ensure provider network adequacy and instead lets states choose any quantitative standard such as minimum provider-to-enrollee ratios, maximum travel time or distance to providers, minimum percentage of contracting providers accepting new patients, maximum wait times for an appointment, or hours of operation requirements.
• Network standards must include all geographic areas covered by the managed care program; however, states may vary standards for the same provider type by geography.
• In setting network adequacy standards, states must consider the diverse needs of their Medicaid enrollees, including individuals with disabilities, special needs, or limited English proficiency.
• States must make network adequacy standards available online and network adequacy standards and access requirements must be included in the state’s managed care quality strategy.

Plans must document to the state that they have the capacity to serve the expected enrollee population. This must occur annually (in addition to at contract start) as well as when there are significant changes in a plan’s operations that affect its capacity. Significant changes include changes that affect the plan’s covered services or geographic service area, the composition of payments to its provider network, or enrollment of a new population. States, in turn, must assure CMS that the plans meet the state’s requirements for availability of services and provide an analysis that supports the state’s certification of each plan’s provider network adequacy. As of October 2022, states are required to use a standard reporting template. CMS plans to make the Network Adequacy and Access Assurances Reports publicly available on Medicaid.gov once a page is established and CMS has completed an initial review of the reports but will make these reports available upon request until then.

States must monitor managed care plan performance, including the availability and accessibility of services (including network adequacy standards). Each state Medicaid agency must have a monitoring system for all managed care programs. The monitoring system must address all aspects of the state’s managed care program, including the performance of each managed care entity in virtually every area of operations and management (e.g., appeals and grievance systems, claims management, enrollee materials and customer service, information systems, marketing, medical management, provider network management, availability and accessibility of services). States and managed care plans may use multiple datasets to monitor network adequacy and access (e.g., MCO-supplied data and reports, administrative or claims data, survey data, etc.). A 2018 MACPAC study found few states referenced metrics or standards to measure access or network adequacy and most states describe network oversight in terms of contract compliance and access monitoring in terms of visits or clinical outcomes.

States that contract with managed care plans must ensure that a qualified “external quality review organization” (or EQRO) performs an annual external quality review (EQR) for each plan. EQR activities are intended to improve states’ ability to oversee and manage the managed care plans they contract with, and help managed care plans improve performance. The primary focus of EQR annual reviews is on quality outcomes and timeliness of and access to services. Validation of plan network adequacy is a mandatory EQR activity. In February 2023, CMS released updated EQR protocols which add a new protocol for the mandatory network adequacy validation activity. States and EQROs must begin using the new network adequacy validation protocol by February 2024. States are required to finalize and post the annual EQR technical report on their website. A recent MACPAC review revealed EQR annual technical reports are sometimes difficult to locate and may be hard for stakeholders to understand (e.g., may be lengthy, technical, and/or report only aggregate results etc.).

Beginning in June 2021, states were required to submit the Managed Care Program Annual Report (MCPAR) to CMS (no later than 180 days after each contract year) for each managed care program the state administers. The first reports were due to CMS in December 2022. The MCPAR must provide information on and an assessment of the availability and accessibility of covered services within managed care contracts, including network adequacy standards. The MCPAR must also include the results of any sanctions or corrective action plans imposed by the state (or other formal or informal intervention) with a contracted managed care plan (described in more detail below). CMS plans to make the MCPAR publicly available on Medicaid.gov once a page is established and CMS has completed an initial review of the reports but will make these reports available upon request until then.

States may impose penalties if managed care plans do not meet contractual obligations, including those related to network adequacy and access standards. States have several enforcement mechanisms including corrective action plans, monetary penalties, or terminating the plan contract. States can also suspend new enrollment after a sanction has been imposed (until the state or CMS determines the reason for the sanction has been resolved). A 2018 MACPAC study found most states do not provide specific enforcement mechanisms for failure to meet access standards or report network data.

How are states currently monitoring network adequacy and access?

KFF’s annual Medicaid budget survey conducted in 2022 asked states to identify network adequacy monitoring activities in place as of July 1, 2022, and penalties issued for non-compliance with network adequacy standards in the past three years. States were also asked to describe how network adequacy standards currently account for enrollee use of public transit and services delivered via telehealth as well as how cultural competency standards for provider networks are defined and enforced. Findings from the survey may provide helpful information and context for provisions included in the Managed Care NPRM.

Network Access and Availability Monitoring

Currently, states use a variety of methods to monitor MCO compliance with network adequacy standards and access requirements (Figure 1 and Appendix). States were asked to identify strategies used to monitor MCO network adequacy, including External Quality Review Organization (EQRO) monitoring activities, as well as other strategies in place to monitor network access and availability, as of July 1, 2022. Results from the survey show EQR organizations are engaged in a variety of network adequacy monitoring tasks. The majority of responding MCO states reported “other” monitoring (in addition to EQR monitoring) across most monitoring categories. While we did not ask states to describe their specific monitoring activities (e.g., breadth, frequency, or how findings inform quality improvement activities), these data provide a high-level snapshot of the various methods being used to track network access and availability as part of EQRO monitoring or other state activities.

Network Adequacy Incentives or Penalties

A MACPAC review of publicly available state network oversight documents found that most states do not provide specific network adequacy enforcement mechanisms. A 2014 HHS Office of Inspector General report found that among states that identified violations of access standards, states most commonly relied on corrective action plans to address them. When states do impose monetary penalties on MCOs, the fines are often very small relative to annual Medicaid profits and revenues. Generally, publicly available information on states’ use of penalties has been limited to date.

Nine responding MCO states reported issuing penalties for non-compliance with MCO contractual network adequacy standards in the past three years (Table 1). States were asked whether they have issued one or more monetary or non-monetary penalties (excluding corrective action plans) for non-compliance with MCO contractual network adequacy standards attributable to MCO performance in the past three years. States reported monetary penalties, liquidated damages, suspending new enrollment, and mandating out of network access (for certain provider types or areas with deficiencies). Areas of non-compliance included failure to meet various state standards (e.g., time and distance, provider-to-member ratios, appointment wait times, accepting new Medicaid enrollees, provider directory requirements) and covered a variety of provider types (e.g., primary care, obstetrics, behavioral health, hospital, home health, vision, dental).

Public Transit and Time and Distance Standards

Only five responding MCO states reported state-developed time and distance standards account for enrollees who rely on public transit (as of July 1, 2022) (Table 2). Time and distance standards establish a maximum travel time or distance that enrollees would have to travel to see a provider in their network. The 2020 CMS Medicaid managed care final rule removed the requirement that states use time and distance standards to ensure provider network adequacy and instead lets states choose any quantitative standard. However, most MCO states establish time and distance standards as part of network adequacy requirements. Medicaid beneficiaries, particularly in urban areas, may rely on public transit rather than driving. CMS recommends states should consider how to adapt time and distance standards based on traffic patterns, car ownership, and public transportation in urban and rural areas.

Telehealth and Network Adequacy

While some states have not altered network adequacy requirements to account for telehealth, other states reported varying approaches to accounting for telehealth availability within network adequacy standards. States were asked how (if at all) their state MCO network adequacy requirements account for services delivered via telehealth. Among states that reported accounting for telehealth, some generally reported MCOs may use the availability of telehealth services to meet network adequacy requirements while other states reported allowing telehealth availability to be considered only under certain circumstances (e.g., for specific provider types) or as part of network adequacy “exception” requests. A few states indicated work currently underway to study this issue further.

Cultural Competency STANDARDS

In developing network adequacy standards, states must consider the ability of network providers to communicate with patients with limited English proficiency in their preferred language and to accommodate patients with disabilities. Plans must participate in state efforts to promote linguistically and culturally competent care. Federal rules also require Medicaid managed care plan directories to indicate providers’ cultural and linguistic capabilities and the availability of skilled medical interpreters.

Although there are no specific federal requirements, most MCO states reported they define cultural competency standards for MCO provider networks in their MCO contracts. Several states reported MCOs are required to submit an annual cultural competency plan to the state Medicaid agency. Some states reported MCOs are required to provide cultural competency training to network providers or must ensure network providers complete cultural competency training. Although states were asked how cultural competency standards are enforced, few specifically described how they monitor and ensure compliance with these standards. Those that did described activities including reviewing MCO network management plans and policies, requiring MCOs to evaluate compliance and report to the state, monitoring compliance as part external quality review, monitoring grievances and appeals, and retaining the ability to apply remedies for non-compliance (e.g., corrective action plans, enhanced monitoring, sanctions etc.). Examples of state cultural competency standards for MCO provider networks are included in Table 4 below.

What are the proposed changes to managed care network adequacy and access rules?

On April 27, 2023, the Biden Administration released two notices of proposed rulemaking (NPRMs), Ensuring Access to Medicaid Services (“Access” NPRM”) and Managed Care Access, Finance, and Quality (“Managed Care” NPRM), to help ensure access to quality health care in Medicaid and the Children’s Health Insurance Program (CHIP) across fee-for-service and managed care delivery systems. Provisions related to network adequacy standards and availability of services in the Managed Care NPRM have been summarized below:

Under the proposed rules, states would be required to develop and enforce wait time standards for certain routine appointments. CMS proposes establishing maximum wait time standards for routine outpatient mental health and substance use disorder (SUD) appointments (no longer than 10 business days), routine primary care appointments (no longer than 15 business days), and routine OB/GYN appointments (no longer than 15 business days). CMS notes the proposed maximum timeframes were informed by standards for the individual Marketplace that will go into effect in 2024. States would also be required to establish a maximum appointment wait time standard for an additional state-selected service. CMS would defer to states on whether and how to vary appointment wait time standards for the same provider type (e.g., adult vs. pediatric, telehealth vs. in-person, geography, etc.) but all standards would need to fall within maximums proposed.

States would be required to use an independent entity to conduct annual secret shopper surveys to validate plan compliance with appointment wait time standards as well as the accuracy of provider directories. To increase the validity and accuracy of states’ efforts to measure network adequacy and access, CMS proposes to require states to use secret shopper surveys as part of their monitoring activities. States would be required to determine each managed care plan’s rate of network compliance with appointment wait time standards (proposing a minimum compliance rate of at least 90 percent). CMS proposes appointments offered via telehealth only be counted toward compliance if the provider also offers in person appointments (and that telehealth visits offered during the secret shopper survey be identified separately). CMS also proposes to require surveys of provider directory data to verify the accuracy of certain data elements (street address, telephone number, active network status with the managed care plan, and whether the provider is accepting new enrollees) for primary care, OB/GYN, outpatient mental health, and SUD providers, as well as the “state-selected” provider type. States would be required to post the results of these surveys on the state’s website. (Effective July 1, 2025, the Consolidated Appropriations Act, 2023 will require Medicaid managed care plan electronic provider directories be searchable and include information on whether each provider offers covered services via telehealth.)

To ensure states’ managed care program monitoring systems capture the enrollee experience, states would be required to conduct an annual enrollee experience survey. CMS indicates results from enrollee surveys would help states evaluate access to care and care continuity and inform the development of quality assessment and improvement strategies. CMS invites comment on whether they should mandate the use of a specific enrollee experience survey or define characteristics of acceptable survey instruments as well as related to the cost and feasibility of implementing enrollee experience surveys for each managed care program.

To better understand how payment rates may impact access, states would be required to submit an annual payment analysis comparing certain managed care provider rates to Medicare rates. Managed care plans would be required to use paid claims data from the immediate prior rating period to determine the total amount paid for primary care, OB/GYN, mental health, and SUD evaluation and management (E&M) services. The payment analysis would provide each managed care plan’s payment levels (by provider type) as a percentage of Medicare rates. Percentages would be reported separately if they differ between adult and pediatric services. States would submit a similar payment analysis for certain home and community-based services (HCBS) (homemaker services, home health aide services, and personal care services) but the comparison would be to Medicaid fee-for-service rates (due to lack of comparable Medicare rates for these services). States would be required to post this information on their website within 30 days of submission to CMS.

Under the proposed rules, states would be required to submit remedy plans to address any areas where managed care plans need to improve access. Remedy plans would identify responsible parties (including states and plans) and specific steps to achieve improvement within 12 months. States would be required to submit quarterly progress updates to CMS on implementation of the remedy plan.

Looking Ahead

Many factors influence access to care including provider supply and capacity, payment rates, accuracy of provider directories, cultural competency/provider acceptability, availability of transportation, etc. As most Medicaid beneficiaries are enrolled in comprehensive MCOs, managed care plan efforts to recruit and maintain their provider networks affect enrollees’ access to care through factors such as travel times, wait times, or choice of provider. Current federal rules require states to establish and enforce network adequacy standards for Medicaid MCOs, but states have flexibility to define those standards. States use an array of provider network standards (e.g., time and distance, provider-to-enrollee ratios, and appointment wait time) as well as varying methods to monitor access and oversee MCO performance. Historically, CMS has provided limited oversight of state access standards. Recent research findings suggest that MCO provider network directories may overstate Medicaid physician availability and current network adequacy standards may not reflect actual access. Study findings also suggest care provided to Medicaid enrollees is often highly concentrated among a small number of physicians.

On April 27, 2023, the Biden Administration released two notices of proposed rulemaking (NPRMs), Ensuring Access to Medicaid Services (“Access” NPRM”) and Managed Care Access, Finance, and Quality (“Managed Care” NPRM), to help ensure access to quality health care in Medicaid and the Children’s Health Insurance Program (CHIP). The Managed Care NPRM aims to standardize and set a quantified floor for what it means to have timely access to care as well as provide transparency around provider payment rates. Data from our 2022 Medicaid budget survey provide a high-level snapshot of current network adequacy and availability monitoring activities and the types of penalties states may impose when standards are not met. This brief also highlights key features of state-developed standards (e.g., how states account for telehealth or public transit in network adequacy standards or define cultural competency standards for provider networks) where there may be variation across states and emerging interest in studying these issues.

Appendix

Most (58%) people with health insurance say they encountered at least one problem using their coverage in the past year, with even larger shares of people with the greatest health care needs reporting such problems, finds a new KFF survey of consumer experiences with health insurance.

Such problems vary across types of insurance but include such things as denied claims for care they thought was covered, difficulty finding an in-network doctor or other provider, and delays and denials of care that involved an insurer’s prior authorization. 

At least half within each of four major types of health coverage – employer, Medicaid, the Affordable Care Act’s marketplace, and Medicare – say they had a problem using their coverage in the past year. 

Such problems are more common among people with greater health care needs. For example:

• Two-thirds (67%) of consumers who rate their own health as “fair” or “poor” encountered a problem in the past year.
• About three-quarters (74%) of those who received mental health treatment in the past year reported a problem.
• More than three-quarters (78%) of those who received a lot of health care (more than 10 provider visits in the past year) reported a problem.

“The survey shows that the sheer complexity of insurance is as big a problem as affordability, particularly for those with the greatest needs,” KFF President and CEO Drew Altman said. “People report an obstacle course of claims denials, limited in-network providers, and a labyrinth of red tape, with many saying it prevented them from getting needed care.”

Today’s report captures key results from the nationally representative survey of 3,605 people with health coverage through an employer, Medicare, Medicaid or the Affordable Care Act’s marketplaces. Future reports will delve more deeply into the experiences of people with those types of coverage, as well as people with specific chronic conditions and needs across types of insurance.

The frequency that people encounter specific insurance problems varies by type of coverage. For example, people with employer and marketplace coverage report denied claims more often than people with Medicare or Medicaid, and people with Medicaid and marketplace coverage more often report problems finding in-network providers.

Insurance problems can contribute to unexpected costs, with more than a quarter (28%) of those who reported problems saying they had to pay more for their care as a result. This includes about a third of those with marketplace or employer coverage who reported problems in the past year.

Among those who reported recent insurance problems, half say they were able to resolve the issue to their satisfaction, while nearly as many say either that the issue had been resolved in a way they didn’t like (28%) or that it remained unresolved (19%). Most insured adults (60%) do not know they have appeal rights by law, and three quarters (76%) do not know what government agency to call for help dealing with their insurance.

Consumers’ insurance problems can affect their ability to get timely, needed care. Among those with recent problems, about one in six say that they were not able to get recommended care (17%), they faced a significant delay in receiving such care (17%), or their health declined (15%) as a direct result.

About half (51%) of insured adults report some difficulty understanding at least one aspect of their health insurance, such as what their insurance will cover (36%), what they will owe out-of-pocket for care (30%), or what their explanation of benefits statement means (30%). About a quarter say that they find it difficult to understand terms such as “deductible” or “copay” (25%) and to figure out which doctors, hospitals and other providers are in network (23%).

People with Mental Health Challenges Have More Problems

The report also probes the challenges facing insured people who rate their mental health as fair or poor, regardless of whether they sought or obtained mental health treatment. This includes about one in five of all people with insurance, and one in three of those with Medicaid coverage.

Substantial shares of enrollees in this group rate the availability (45%) and quality (37%) of mental health therapists and providers covered by their insurance as “fair” or “poor.” 

Among those who say their own mental health is fair or poor, 43% say that there was a time in the past year when they did not get needed mental health care. Among young adults under age 30 who describe their mental health as fair or poor, more than half (55%) say they did not get needed mental health care in the past year.

People cite various reasons for not getting needed mental health care, but insurance was a factor for many.  Among all insured adults who didn’t get needed mental health care, more than four in 10 (44%) say they couldn’t afford the cost, and more than a third say it was because their insurance wouldn’t cover it. 

• One in six (16%) of all insured people say they have had problems paying or an inability to pay for medical bills in the past year, including similar shares of those with marketplace (19%), employer (17%), and Medicaid (16%) coverage, as well as 12 percent of people with Medicare.
• Premiums also can be an issue for consumers, particularly for those with employer and marketplace plans.  About half of those with marketplace or employer coverage give their insurance plan low marks for the amount that they pay in premiums and the amount they pay out-of-pocket to see a doctor. Far fewer of those with Medicare or Medicaid rate those aspects of their coverage negatively.
• In spite of the problems people report using their insurance, a large majority (81%) give “excellent” or “good” ratings when asked to rate their insurance overall. 
• Large majorities of consumers with insurance say they would support requirements on insurers that could make it easier to avoid or resolve insurance problems. These include requirements to maintain accurate and up-to-date information about who is in their network (91%) and to provide simpler, easier-to read statements explaining coverage decisions and how to appeal if you disagree (94%), all of which have been enacted by Congress though not all have been implemented.   

Designed and analyzed by public opinion researchers at KFF, the KFF Survey of Consumers Experiences with Health Insurance was conducted February 21-March 14, 2023, online and by telephone among a representative sample of 3,605 adults in the U.S. with health insurance coverage, including 978 adults with employer-sponsored insurance, 815 adults with Medicaid coverage, 885 adults with Medicare, and 880 adults with marketplace insurance. Interviews were conducted in English and in Spanish. The margin of sampling error is plus or minus 2 percentage points for the full sample. For results based on subgroups, the margin of sampling error may be higher. 

The reproductive health landscape in the United States changed dramatically following the Supreme Court ruling in Dobbs v. Jackson Women’s Health Organization, which overturned Roe v. Wade. In the wake of this ground-shaking decision, Alina Salganicoff and Usha Ranji discuss the intersection of the new limits on abortion with ongoing gaps in contraceptive care. In this commentary for Women’s Health Issues, a publication of the Jacobs Institute of Women’s Health, KFF experts discuss contraceptive coverage and financing policies, access points within the delivery system, and the role of mis- and disinformation.

DEERFIELD, Ill. & SAN FRANCISCO, June 13, 2023 – Walgreens is teaming up with Greater Than HIV, a public information initiative of KFF, along with health departments and community organizations, to provide free HIV testing and counseling as part of the largest National HIV Testing Day event in the nation. Hundreds of local health departments and community organizations will be at more than 400 Walgreens stores offering free, confidential and fast HIV test results. 

“This unique community-led effort brings people together in a familiar setting to receive a free HIV test, get the latest on HIV prevention and treatment and connect with local services,” said Tina Hoff, senior vice president, KFF. “Our Greater Than HIV and Walgreens National HIV Community Partnership provides a great opportunity to help people know their HIV status and take action to protect their health.” 

Click here for a list of participating Walgreens stores and hours to get a free HIV test on Tuesday, June 27. Counselors will be available to answer questions about HIV prevention and treatment options, and provide referrals for PrEP (pre-exposure prophylaxis), FDA-approved medications that are highly effective in preventing HIV. HIV test manufacturers, Abbott, BioLytical Laboratories, Inc., Chembio Diagnostics, Inc. and OraSure Technologies, Inc., donated rapid tests to support the activation. 

“Each year on National HIV Testing Day, Walgreens teams up with Greater Than HIV, KFF’s public information initiative, and community partners to provide free and confidential HIV testing and counseling at hundreds of Walgreens locations, especially in areas disproportionately impacted by HIV,” said Rick Gates, chief pharmacy officer, Walgreens. “This program builds on our local and national initiatives to reach people in community-settings so that HIV prevention and treatment options are more equitable, accessible and convenient.” 

KFF’s Greater Than HIV and Walgreens National HIV Community Partnership is an ongoing commitment to work with local health departments and community organizations to expand HIV testing and information through non-traditional settings. Since 2011, the partnership has provided more than 76,000 free HIV tests, including over 15,000 self-tests provided during the height of the COVID-19 pandemic.

Walgreens is committed to expanding testing as a critical component in ending the HIV epidemic, helping to inform individuals if they should be linked to HIV treatment services or if they qualify for PrEP. All of these tools help to prevent further transmission of HIV.

In addition to providing services to help prevent and treat HIV, Walgreens invests in training its pharmacy team members to address the specific challenges faced by people living with HIV. More than 3,000 Walgreens pharmacists are specially trained to offer one-on-one, confidential and stigma-free HIV care including medication counseling, information on prevention options and how to apply for financial assistance programs.

About Walgreens 

Walgreens (www.walgreens.com) is included in the U.S. Retail Pharmacy and U.S. Healthcare segments of Walgreens Boots Alliance, Inc. (Nasdaq: WBA), an integrated healthcare, pharmacy and retail leader with a 170-year heritage of caring for communities. WBA’s purpose is to create more joyful lives through better health. Operating nearly 9,000 retail locations across America, Puerto Rico and the U.S. Virgin Islands, Walgreens is proud to be a neighborhood health destination serving nearly 10 million customers each day. Walgreens pharmacists play a critical role in the U.S. healthcare system by providing a wide range of pharmacy and healthcare services, including those that drive equitable access to care for the nation’s underserved populations. To best meet the needs of customers and patients, Walgreens offers a true omnichannel experience, with fully integrated physical and digital platforms supported by the latest technology to deliver high-quality products and services in communities nationwide. 

About KFFKFF is the independent source for health policy research, polling, and journalism. Its mission is to serve as a nonpartisan source of information for policymakers, the media, the health policy community, and the public.  

KFF’s Greater Than HIV initiative is a leading public information response focused on HIV in the U.S. Through localized Greater Than HIV campaigns, KFF works with health departments and community partners to reach those most affected and in need with the latest on testing, prevention and treatment. This public-private partnership model helps extend the reach of limited resources in high need areas.

Introduction

Immigrants are an integral part of our nation, including our nation’s workforce. Immigrants support the U.S. economy and its workforce by filling unmet labor market needs, especially in industries such as construction and agriculture that are at increased risk of adverse health outcomes and injuries, including climate-related health hazards.^1 ,2  Through entrepreneurship and establishment of businesses, immigrants also create jobs that generate employment for other U.S. residents, including U.S.-born citizens.³  However, their employment patterns contribute to them having higher uninsured rates and facing increased health risks relative to their U.S.-born peers.⁴  While their employment patterns, in part, reflect lower educational attainment levels and skills among immigrant workers versus U.S.-born workers, research and data suggest that some immigrant workers may be overqualified for their jobs—that is having education or skills beyond what is necessary for their job.^5 ,6  Addressing this occupational mismatch could help reduce disparities in health and health care faced by immigrant families and positively benefit the U.S. economy.

This brief examines socioeconomic characteristics and employment patterns among immigrant workers and examines how they compare to U.S.-born workers, including differences among college-educated workers. It discusses the implications of these patterns for their health and well-being as well as the nation’s economy. It is based on KFF analysis of the 2022 Current Population Survey Annual Social and Economic Supplement. The analysis is limited to nonelderly adult workers between ages 19-64 who are employed either full-time or part-time in the U.S. labor force. All differences between U.S.-born and immigrant workers described in the text are statistically significant at the p<0.05 level. In sum, it finds:

• In 2021, there were 27 million immigrants employed in the labor force, making up close to one in five (17%) nonelderly adult workers (ages 19-64) in the U.S. The share of nonelderly adults who were employed was similar across U.S.-born citizens (78%), naturalized citizens (79%), and noncitizens in the U.S. for five or more years (76%), while it was 63% among recent noncitizens (in the U.S. for less than five years). Compared to their U.S.-born counterparts, nonelderly adult immigrant workers were more likely to be Hispanic or Asian, were younger, and had lower levels of educational attainment.
• Among nonelderly adults, noncitizen workers were more likely than citizen workers to be employed in construction, agricultural, and service jobs. While some of these differences in occupation patterns likely reflect lower educational levels and skills among immigrant workers, differences in occupations persisted among college-educated workers. One in ten noncitizen workers with a college degree were employed in service jobs, compared with 6% of their U.S.-born peers. College-educated noncitizen workers were also more likely than their citizen counterparts to be employed in construction and transportation jobs.
• Reflecting these differences in employment patterns, noncitizen workers were more likely than citizen workers to be low-income and uninsured, even among those with college degrees. Roughly one in three noncitizen workers was low-income (below 200% of the federal poverty level (FPL)), compared with 15% of U.S.-born workers. In addition, over three in ten nonelderly adult noncitizen workers lacked health insurance, over three times higher than the uninsured rate of their citizen counterparts, reflecting lower rates of private coverage. Incomes and coverage rates were higher among college-educated workers across citizenship statuses, but, among college-educated nonelderly adult workers, noncitizens still were more likely to be low-income and uninsured than their citizen counterparts.

Immigrant Worker Characteristics

In 2021, there were 27 million immigrants employed in the labor force, making up close to one in five (17%) nonelderly adult workers in the U.S. Roughly 8% of nonelderly workers were naturalized citizens and 9% were noncitizens, the majority of whom had been in the U.S. for five or more years (Figure 1). The share of nonelderly adults (ages 19-64) who were employed on either a full- or part-time basis was similar across U.S.-born citizens (78%), naturalized citizens (79%), and noncitizens in the U.S. for five or more years (76%), while it was 63% among recent noncitizens.

Compared to their U.S.-born counterparts, nonelderly adult immigrant workers were more likely to be Hispanic or Asian, were younger, and had lower levels of educational attainment (Figure 2).

• Among nonelderly adult workers, both naturalized citizens and noncitizen immigrants included higher shares of Hispanic and Asian adults compared to U.S.-born citizens, although the shares varied by citizenship status and length of time in the country. Over six in ten (62%) of noncitizen nonelderly adult workers in the U.S. for five years or more were Hispanic, while one in three (31%) naturalized citizens were Asian. Among more recent nonelderly noncitizen adult workers in the U.S. for less than five years, over half were Hispanic (53%) and one in five (21%) were Asian.
• Recent noncitizen nonelderly adult workers had the largest share of younger workers, with over half (55%) between 19 and 34 years of age, while those who had been in the country for five or more years and naturalized citizens had the largest share of workers between ages 35-54 (57%). Naturalized citizen nonelderly adult workers were older compared to their U.S.-born and noncitizen counterparts, with a quarter between ages 55-64.
• Roughly a quarter of noncitizen nonelderly adult workers had less than a high school education, compared to just 3% of their U.S.-born peers. However, similar proportions of nonelderly adult U.S.-born citizens (41%), naturalized citizens (47%), and recent noncitizens (44%) in the labor force had a bachelor’s degree or higher. In contrast, less than three in ten nonelderly adult noncitizen workers in the country for at least five years (29%) had at least a college degree. Research shows that an increasing number of immigrants who arrived in the U.S. in the last five years have a college degree, driven largely by an increase in the share of high-skilled immigrants arriving from Asian countries.⁷ 

Occupations Among Immigrant Workers

Among nonelderly adults, noncitizen workers were more likely than citizen workers to be employed in construction, agricultural, and service jobs. Noncitizen workers were nearly three times as likely to be employed in construction jobs compared to naturalized and U.S. born citizen workers (14% vs. 5% and 4%, respectively) (Figure 3). Moreover, one in four (25%) noncitizen workers was employed in service jobs, such as food preparation and health care support, compared with 18% of naturalized citizen and 15% of U.S.-born citizen workers. Small shares of workers were employed in agriculture across citizenship statuses, but noncitizen workers were slightly more likely to be employed in these jobs than their citizen counterparts (2% vs. less than 1%), and they accounted for 18% of all agricultural workers. They also were more likely to be employed in production and transportation jobs compared with their citizen counterparts. Occupation patterns among naturalized citizen workers were more similar to U.S.-born citizen workers, although they were more likely than their U.S.-born peers to be employed in service jobs.

While some of these differences in occupation patterns likely reflect lower educational levels and skills among immigrant workers compared with U.S.-born workers, differences in occupations persisted among workers with a college degree. Among nonelderly adult workers with a bachelor’s degree or higher, nearly half of workers were employed in professional occupations, such as accounting, engineering, and legal services, across citizenship statuses. However, one in ten noncitizen workers with a bachelor’s degree or higher were employed in service jobs such as food preparation and health care support, compared with 6% and 7% of their U.S.-born and naturalized citizen peers (Figure 4). College-educated noncitizen workers were also more likely than their citizen counterparts to be employed in construction and transportation jobs. There were no significant differences in employment in these occupations between naturalized and U.S.-born college-educated workers, although naturalized citizens were less likely than U.S-born citizens to be in management occupations (26% vs. 29%).

Income and Health Coverage among Immigrant Workers

Reflecting these differences in employment patterns, noncitizen workers were more likely than citizen workers to be low-income (income below 200% of the FPL). Nearly one in three (31%) noncitizen workers in the country for five or more years was low-income, including one in ten (9%) who had incomes below poverty (Figure 5). This share was 38% among recent noncitizen workers in the country for less than five years, including 16% with incomes below the poverty level. In contrast, 15% of U.S.-born workers were low-income, with 4% having incomes below poverty.

Incomes were higher among college-educated workers across citizenship statuses, but, among college-educated nonelderly adult workers, noncitizens were still more likely to be low-income than their citizen counterparts. Over one in ten (11%) college-educated noncitizen workers in the country for five or more years were low-income, with this share rising to 24% among college-educated recent noncitizen workers, including 10% who had incomes below the poverty level (Figure 5). In contrast, 5% of college-educated U.S.-born citizen workers were low-income, with just 1% having income below poverty.

Noncitizen nonelderly adult workers were also more likely than their citizen counterparts to be uninsured, even among those with college educations (Figure 6). Over three in ten nonelderly adult noncitizen workers lacked health insurance, over three times higher than the uninsured rate of their citizen counterparts, reflecting lower rates of private coverage among these workers. While uninsured rates were lower among college-educated workers across citizenship statuses, these differences between citizens and noncitizens persisted. Among college educated nonelderly adult workers, noncitizens were more four times as likely to lack health coverage than U.S.-born workers, with more than one in ten uninsured compared with 3% of their U.S.-born peers. This share rose to 13% among recent noncitizen workers with a college education. Medicaid coverage does not fully offset the larger gaps in private coverage for noncitizen workers, likely reflecting Medicaid eligibility restrictions for noncitizen immigrants, particularly those in the country for less than five years and for those who are undocumented, who are ineligible for any federal coverage options.⁸ 

Implications for Immigrant Health and the U.S. Workforce

Noncitizen immigrant workers are disproportionately employed in occupations with lower wages that often do not offer employer-sponsored health coverage, contributing to higher poverty and uninsured rates. The occupations in which noncitizen immigrant workers are disproportionately employed, such as service, farming, and construction jobs, also have higher adverse health risks including but not limited to climate related health risks such as heat strokes and respiratory illnesses and workplace injuries.^9 ,10  Undocumented immigrant workers may face even greater employment challenges due to lack of work authorization, which increases risk of potential workplace abuses, violations of wage and hour laws, and poor working as well as living conditions.¹¹ 

While some noncitizen immigrants are in lower-wage higher risk jobs due to limited experience, skills, and lack of work authorization, others may be overqualified for their positions, contributing to negative implications for immigrant families and the overall U.S. economy. This analysis finds that disparities in employment, income, and health coverage for noncitizen workers persisted among college-educated workers, suggesting some were employed in jobs for which they may be overqualified. While language barriers and work eligibility restrictions may explain part of this employment pattern, other factors such as time since immigration, age, and cultural obstacles may also play a role. Research suggests that immigrants with limited English proficiency, those who earned degrees in a country outside the U.S., and those who are recent or first-generation immigrants are more likely to experience underutilization of skills in the workplace.¹²  In addition, cultural barriers such as lack of familiarity with the U.S. labor market and lack of professional and social networks can also lead to this occupational mismatch. Beyond contributing to higher rates of poverty and uninsured rates among immigrants, this occupational mismatch can also have adverse impacts on mental health. Research suggests that working in jobs for which people may be overqualified can lead to lower rates of job as well as life satisfaction and declines in mental health.^13 ,14  A shortage of immigrant workers, including those who are college-educated, can also have a negative impact on productivity, job creation, and can consequently slow down economic growth.¹⁵  Moreover, the employment of overqualified immigrants in low-skilled jobs contributes to forgone earnings as well as tax revenues.

Actions to increase job opportunities for immigrants that fully utilize their skills could not only improve the health and well-being of immigrants but also support the economy by helping to address the country’s unmet labor market needs. Broadening pathways for migrants to enter the U.S. to fill gaps in the labor force, improving the processing of applications for work visas and work authorization, recognizing credentials for immigrant professionals, and investing in English language training for recent immigrants could benefit the U.S. economy by helping immigrants find jobs that are an appropriate match for their educational background and training.¹⁶ , ¹⁷ , ¹⁸  These actions could also support the U.S. economy by helping to fill gaps in industries experiencing the greatest shortage of workers. These include lower-skilled occupations such as manufacturing and food services, but also higher-skilled occupations such as health, professional, and business services, especially following the labor force disruptions that resulted from the COVID-19 pandemic.¹⁹  As the U.S. continues to experience workforce shortages, it is important to fully utilize the skills and potential of immigrants who form a growing share of the country’s labor market not only as workers but also as job creators.

1. The Brookings Institution (2022), “Who are the 1 million missing workers that could solve America’s labor shortages?”, https://www.brookings.edu/blog/up-front/2022/07/14/who-are-the-1-million-missing-workers-that-could-solve-americas-labor-shortages/, accessed April 5, 2023. ↩︎
2. CNN (2022), “America needs immigrants to solve its labor shortage”, https://www.cnn.com/2022/12/22/economy/immigration-jobs/index.html, accessed April 5, 2023. ↩︎
3. Northwestern University (2020), “Immigrants to the U.S. Create More Jobs than They Take”, https://insight.kellogg.northwestern.edu/article/immigrants-to-the-u-s-create-more-jobs-than-they-take, accessed April 5, 2023. ↩︎
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