The blog of the Urban Institute
December 15, 2020

Amid the COVID-19 Pandemic, Medicaid Expansion Is More Important Than Ever, and Young Adults Would Gain the Most

December 15, 2020

Throughout the pandemic, millions of Americans have lost work, and consequently, millions have lost their health insurance. For many, Medicaid through the Affordable Care Act (ACA) offers an option to maintain health insurance, but because the US Supreme Court made Medicaid expansion a state option in 2011, not every state offers it. As of November 2020, 36 states and the District of Columbia have expanded Medicaid eligibility.

Research shows that Medicaid expansion has had considerable impact in states that have adopted it, with nearly 14 million people enrolled in the Medicaid expansion program. Medicaid expansion has not only been proven to save lives, but it has also been shown to increase the financial security of uninsured people, improve hospital finances, and result in net budget saving for states.

Voters in Missouri and Oklahoma, 2 of the 14 states that have not expanded Medicaid, approved expansion through referenda, but neither state has implemented it. In other states that passed similar referenda, government opposition caused delays of up to two years, leaving the timeline of when eligible residents can start enrolling in the program unclear.

We have recently updated our analysis of what would happen if the remaining 14 states were to expand Medicaid eligibility, taking into account the unprecedented loss of jobs caused by the COVID-19 pandemic. We estimate that expanding Medicaid now would reduce the number of uninsured people by 4.4 million, and we find three key takeaways.

  1. The COVID-19 pandemic has increased the impact of Medicaid expansion in the remaining 14 states. Before the pandemic, we estimated that expansion in the 14 states that have not yet expanded Medicaid would reduce the number of uninsured people by 3.8 million. Nebraska expanded Medicaid after that brief was published, so we omit the impact of that state’s expansion in this analysis. Since that previous estimate, pandemic-related job losses have led to substantial changes in health coverage and eligibility for Medicaid. We now find that Medicaid expansion in the 14 remaining states could reduce the number of uninsured people by 4.4 million, 600,000 more than before the pandemic.
  2. Young adults would experience the largest gains in health coverage. Although all age groups would benefit from Medicaid expansion, we find that young adults (ages 19 to 24) would gain the most. Young adults currently have the highest uninsurance rates in states that have not expanded Medicaid at 27.5 percent, compared with 18.4 percent of adults ages 25 to 64 and 6.1 percent of children (ages 18 or younger). COVID-19-related closures have also hit young adults hard, with 10.9 percent in nonexpansion states having lost employment, compared with just over 9 percent for older adults. If these states were to expand Medicaid eligibility, the number of uninsured young adults would fall by 46 percent, compared with 29 percent for older adults and 15 percent for children.

    Young adults have lower health care costs on average than older adults, but amid a pandemic, health coverage matters even more. Centers for Disease Control and Prevention data show young adults and children make up an increasingly large share of confirmed COVID-19 cases. And Medicaid expansion has led to a statistically significant improvement in financial security for young adults as well as older ones.
  3. Children would also benefit as more parents seek coverage. Children have low uninsurance rates because of high eligibility thresholds through Medicaid and the Children’s Health Insurance Program. In all states, these thresholds were already above 138 percent of the federal poverty level before the ACA, so none directly gained eligibility. But as more parents seek and obtain coverage, more children are covered. We estimate that 250,000 children in nonexpansion states would gain coverage under Medicaid expansion.

Medicaid expansion has always increased health coverage, but it would have an even greater impact now, given pandemic-related job losses. Many states that have expanded Medicaid in recent years did so relatively quickly, meaning the remaining states can expand Medicaid eligibility while the need is still great.

Next month, we will publish more detailed estimates of what would happen if the remaining states expanded Medicaid, incorporating pandemic-related job losses and focusing on young adults and children. But the topline finding from these data is clear: expanding Medicaid could help millions more people, particularly young adults, obtain health insurance during a pandemic.

A patient receives a COVID-19 test through a window at a testing site in Chelsea Square in Chelsea, Massachusetts, on December 7, 2020. (Photo by Jessica Rinaldi/The Boston Globe via Getty Images)

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