The outlook for big health insurers is stable for the rest of 2023 despite challenges that include the potential loss of millions of Medicaid enrollees, a new report from Moody’s Investors Service indicates.
More than 10 million people have been disenrolled from Medicaid as a pandemic-era program to keep people covered with health insurance is unwinding, but Moody’s Investors Service says the financial impact to health insurers “so far has been relatively small,” the report issued last week said.
Almost every major publicly-traded health insurer is listed in the report, including CVS Health’s Aetna, Cigna, Centene, Elevance Health, Humana, Molina and UnitedHealth Group. Those with large businesses administering Medicaid coverage for the poor via contracts with states made up a chunk of what they lost from growth in Americans purchasing individual coverage under the Affordable Care Act and enrollment growth from other commercial plans they operate.
“Earnings were also supported by improved individual market performance and higher levels of commercial enr0llment than we anticipated in our 2023 outlook,” Moody’s said. “Overall, membership has grown despite the ongoing Medicaid redetermination process.”
The so-called “Medicaid redeterminations process” is about halfway done, Moody’s said, citing reports showing that more than 10 million Medicaid enrollees have been disenrolled. Medicaid redetermination, also described as Medicaid renewal or Medicaid recertification, is essentially when people are asked to show they are qualified for such coverage.
But things are changing somewhat this year given the end in May of the U.S. public health emergency that boosted the number of Americans covered when Medicaid redetermination temporarily ended three years ago.
“Approximately 71% were disenrolled for procedural reasons, and many of those will be re-enrolled when paperwork is completed,” Moody’s said. “As expected, this is somewhat reducing the earnings growth rate of the health insurers we rate, but it is only one of several drivers of this trend. We expect that most of the disenrollees will re-enroll in the individual market or in employer-based insurance.”
The redetermination process should be completed around May 2024, Moody’s said.
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