End of public health emergency could mean increased cost for employers 

Medicaid “redetermination” is a process where States annually review Medicaid eligibility to determine who can remain on the program, and who no longer qualifies. This process has been put on hold since 2020 because of the Public Health Emergency (PHE) for the COVID-19 pandemic. Right now, it seems fairly likely that the PHE will end in 2023. When it does, it is to be expected that some percentage of current Medicaid enrollees will lose coverage and enroll in their employer-sponsored plans, which would result in higher health benefit costs for employers that see enrollment growth.

How much of an impact might this have?

Our best estimate as of now, based on available data and projections of how the affected individuals will respond, is that the redetermination process could increase the overall enrollment in employer plans (and, by extension, cost) by 1% - 3% in 2023. Of course, some companies will feel no impact, while for others enrollment gains may be much higher than the national average. Industries that have higher Medicaid-eligible populations, such as hospitality and retail, will be the most affected.

When will we see the impact?

States will have 12-14 months after the end of the PHE to complete the redetermination, but we expect employer plans may begin to see the impact shortly after the PHE ends as the process is gradual and dependent on State resources and motivation to move ineligible individuals off Medicaid. So, if the PHE ends in early 2023, the impact will be seen primarily in 2023 with some spillover into 2024. Depending on your situation and the size of your Medicaid-eligible population, it might be useful to consider a scenario in which plan enrollment rises in 2023.