By Suzanne Wikle

This is the second in a series of commentaries from CLASP experts that explore dimensions of poverty ahead of the U.S. Census Bureau’s annual release of poverty, income, and health insurance coverage statistics from the previous year. On September 10, we’ll get a snapshot of the economic hardship children, youth and young adults, and families experienced in 2023. Ahead of the release, CLASP experts are offering key insights on the impending 2025 tax debate, raising labor standards and enacting new regulations to protect workers, and a fully funded child care system’s role in ending poverty. And, in honor of the 60th anniversary of the War on Poverty, we’ll examine what has and has not changed in the past six decades. The complete series is available here. 

Next month the Census Bureau will release data about how many people in America didn’t have health insurance in 2023. The previous two years showed record-low rates of uninsurance – 8 percent in 2022 and 8.6 percent in 2021 – driven by two key policy changes in response to the COVID pandemic. The 2023 figures may show an increase in uninsurance as millions of people were disenrolled from Medicaid starting in April 2023 when one of these provisions expired – with more threats ahead.

Between March 2020 and April 2023, states were not allowed to disenroll anyone from Medicaid, and tax credits in 2021 to subsidize the purchase of Affordable Care Act (ACA) Marketplace coverage were increased. This change made Marketplace insurance options significantly more affordable. Collectively, these pandemic-era actions led to the greatest increase in health insurance rates since the ACA itself.

As states resumed normal operations for Medicaid in April 2023, they could begin disenrolling people who were no longer eligible or who didn’t complete their renewal process. As a result, 2023 saw a net loss of nine million people from Medicaid, including more than four million children. Therefore, we expect to see a clear drop in Medicaid coverage in the upcoming Census data, even though many states did not complete their unwinding process until 2024.

What’s less clear is how many of those who lost Medicaid coverage gained other coverage, either through an employer or through individual coverage purchased on the ACA Marketplaces. September’s data release will provide more insight into this question.

Likely somewhat offsetting Medicaid losses, Marketplace enrollment hit a new high in 2023 with 16.4 million enrollments (2024 enrollment in the Marketplace grew even more, to 21.3 million people). The growth in Marketplace enrollment since 2020 has been attributed largely to enhanced tax credits passed in 2021 that subsidize the purchase of Marketplace coverage, making Marketplace insurance options significantly more affordable.

The record-high rate of insurance coverage is at risk for several reasons. The end of the COVID-era Medicaid continuous coverage provision has brought back red tape and paperwork hurdles for Medicaid members. The unwinding also highlighted the variation among states, with some recording much higher rates of coverage loss than others due to administrative policy decisions and implementation.

We expect to see even more coverage losses reflected in future data. Some states didn’t start Medicaid disenrollments until later in 2023, and so most of their coverage losses will not be reflected in 2023 data.

The slated end of enhanced subsidies for people purchasing Marketplace plans could also affect the recent gains in health insurance rates. Passed by Congress during the pandemic, these tax credits are scheduled to end in December 2025. In their absence, many people will be priced out of Marketplace plans and become uninsured. The debate about extending enhanced Marketplace subsidies will be part of the larger tax debate looming in 2025 – a debate that will either set our country on a path of investing in health insurance, child tax credits to reduce poverty, and other critical supports or will give more money to wealthy individuals and large corporations at the expense of public goods that benefit all of society.