Medicaid enrollment drops as employment rises

Medicaid enrollment is dropping as the economy improves and unemployment drops, according to a new report issued Monday.

Medicaid enrollment has shrunk by 1.5% or 1.1 million individuals since last year with enrollment hitting 74.2 million, according to the report authored by consulting firm A2 Strategy Group and released at Medicaid Health Plans of America's annual conference.

All in all, 34 states reported shrinking Medicaid enrollment this year, with an average 3% decline. Illinois posted the greatest enrollment decrease at 8.3%.

But Medicaid work requirements weren't cited as a possible catalyst for the decline.

Only Arkansas has implemented a work requirement policy and nearly 9,000 people have been taken off the Medicaid rolls since June 1 for failing to comply. Indiana and New Hampshire aren't expected to implement their work programs until 2019 and Kentucky's work requirement is on hold after a federal judge sent the waiver proposal back to the CMS.

The report theorized that fewer people are eligible for Medicaid thanks to job growth and pay raises in the booming economy.

"The populations enrolled under Medicaid expansion should be more economically volatile and improving wage and employment conditions may shift some individuals beyond the limits of expanded Medicaid coverage into either subsidized individual coverage or employer-sponsored insurance," the report stated.

Comparably, populations that are less economically sensitive, such as those in long-term care settings, children and the disabled, are more likely to remain on Medicaid regardless of economic conditions, the report said.

States continue to rely on managed care to keep Medicaid costs down. More than 74% of total beneficiaries are now covered by a private managed-care plan in 2018, up from 73% last year, according to the report. Forty-one states and the District of Colombia have some private managed Medicaid in use.