Pandemic-era Medicaid enrollees are shifting to Obamacare in a big way

One of the nation’s largest health insurers is seeing a large increase in individual enrollments under the Affordable Care Act, in part from consumers who were covered by Medicaid during the Covid-19 pandemic.

Elevance Health, which runs Blue Cross and Blue Shield plans in 14 states, is seeing thousands of Americans formerly covered by Medicaid switch to individual coverage on the ACA exchanges, as states remove the “continuous coverage requirement” that was introduced at the start of the pandemic to ensure people maintain health benefits.

Elevance Health’s 18.2% increase in individual health plans to 949,000 in the second quarter was the largest percentage increase of any type of health plan the company sells, according to the health insurance company’s earnings report released Wednesday. By comparison, Elevance’s total membership grew 2% in the quarter, or 938,000, to 48 million as of June 30, 2023 compared to a year ago. Meanwhile, Elevance Health’s Medicaid enrollment was up 5% to 11.7 million compared to the same period a year ago, but was down 1% from 11.8 million at the end of the first quarter.

With states escalating the so-called “Medicaid realignment process” since the US public health emergency ended in May, many analysts fear that health insurers will lose much of their Medicaid business. And they can still be there a new report from William Blair Equity Research out Wednesday citing data indicating that “almost 2 million people have been unenrolled from Medicaid to date, though the process has a long way to go.”

Medicaid Re-Eligibility, also known as Medicaid Renewal or Medicaid Recertification, is essentially when people are asked to prove their eligibility for such coverage.

“Many of the people who have lost access to Medicaid thus far are losing it for administrative reasons,” Elevance Health president and CEO Gail K. Boudreaux told analysts on a phone call Wednesday morning to discuss second-quarter earnings. “We expect many of these consumers to re-enroll in Medicaid over time.”

But Elevance Health’s second-quarter earnings report told the story of consumers also moving to Obamacare, which is good news for insurers worried about losing a large chunk of their Medicaid business.

“Coverage transitions are usually not instantaneous, but emerging data points suggest that consumers who lose Medicaid are beginning to move to ACA exchange plans,” Boudreaux told analysts. “It’s still early in the process.”