The End of the Public Health Emergency through the Lens of Medical Debt

On February 9th, the Biden Administration renewed the public health emergency (PHE) for the final time. The scheduled end of the PHE will be May 11th — just over three years after it was declared by Health and Human Services (HHS) in January of 2020. As a reminder, the PHE is a tool for government to act swiftly, allowing for government to respond to COVID-19 and mitigate harm to individuals and communities; this includes mandates (such as coverage of COVID tests without cost-sharing), policy flexibility (waivers that relax regulatory requirements) and support for innovation (such as relaxing HIPPA requirements for telehealth). The advance notice is intended to help states prepare and the Administration released a transition roadmap to ease any disruptions for people. While these flexibilities made possible by the PHE will shift access for people, the health policy community is laser focused on Medicaid.

Medicaid was decoupled from the PHE under the Continuing Appropriations Act passed in December. Less discussed is that the Supplemental Nutrition Assistance Program (SNAP) was also delinked. This means that both programs are scheduled to unwind — SNAP is underway, and states could initiate Medicaid redetermination as early as February 1 while the enhanced federal funding starts to step down in April. As an organization focused on medical debt and driving relief for patients, we are monitoring these changes. Any loss of coverage or financial stability is a risk for medical debt; as the PHE comes to a close, we will be focused on:

1. Financial stress. As part of the Consolidated Appropriations Act, Congress ended the tie between SNAP and the PHE starting in February. For families, this means a loss of $95 a month in benefits, on average, in the more than 30 states still offering assistance, according to the Center on Budget and Policy Priorities (CBPP). The termination creates more financial instability for households that are already stretched due to inflation and mounting fears about an economic recession. Research shows that medical debt, like food access, is a social determinant of health. The termination of SNAP and end of continuous health coverage, together, are a financial setback for families. When households are stretched, medical bills go unpaid.
2. Health coverage loss. Now that Medicaid is delinked from the PHE, it has its own unwinding date: April 1. Millions of people have relied on Medicaid for their health coverage over the past three years. According to KFF, almost 20 million more people enrolled in Medicaid since the January 2020 PHE announcement; states received additional funds to absorb the increase and were required to continuously cover people. As redeterminations for eligibility begin, with guardrails, millions of people could lose their health coverage. With such a large volume of Medicaid redeterminations, state level systems could be overwhelmed and lead to inappropriate terminations of coverage. For providers, the loss of continuous coverage means more uninsured patients, less payment, and more work trying to support patients to enroll in coverage. A new briefpredicts that over 18 million people will lose Medicaid coverage and about 4 million will remain uninsured. When people are uninsured, they avoid accessing the health care they need — uninsured people are more likely to carry medical debt.
3. Health coverage navigation. Health insurance is hard to understand — purchasing your own health insurance can be overwhelming despite improvements in the ACA Marketplaces. Navigators, assisters and Consumer Assistance Programs (CAPs) are critical to getting and keeping people insured. The Biden Administration invested in health insurance navigation following a lapse in funding but more needs to be done. For example, CAPs have not been funded by Congress since the passage of the ACA yet are an essential resource for patients enrolling in coverage, appealing insurance denials, and settling medical bills. Some states invest in CAPs but most do not — as more people need navigation services but cannot access them, people are at risk of medical debt.
4. High out-of-pocket (OOP) costs. Thanks to the Inflation Reduction Act, ACA plan subsidies are more affordable, bringing people’s premiums to zero if their income is below 150 percent FPL or a little over $20,000. Hopefully, people will enroll in ACA plans if they are no longer eligible for Medicaid. Importantly, ACA plans differ from Medicaid plans. Marketplace plans have out-of-pocket (OOP) maximums and more cost-sharing responsibilities — specifically, ACA plans have different drug formularies, provider networks, and benefit designs than Medicaid. The increase in cost burden may deter people from seeking care or maintaining coverage if they are worried about monthly expenses. To avoid medical debt, patients may need support in navigating new health insurance plans — states have several tested strategies to leverage to keep people covered.
5. Lack of awareness about financial assistance. If predictions are correct, millions of people could become uninsured in 2023. Uninsured people often avoid care until they no longer can. They are less likely to receive preventive care or care for a chronic condition and are more likely to delay care due to fears about medical bills. A nonprofit hospital’s financial assistance program (FAP) is a helpful resource. Hospital FAPs are designed to help uninsured people, specifically, if they meet certain eligibility requirements; however, many hospital FAPs also provide some financial relief to people with insurance for certain income brackets. Many patients do not know about these programs, and they can be difficult to navigate without some assistance. It will be important to work with hospital partners to elevate these programs and ease access to them.

The end of the PHE highlights many of the weaknesses of our patchworked health coverage system. Identifying ways to ease transitions across programs, increase affordability, and ensure access to needed services are all key strategies in protecting people from medical debt. Medical debt continues to be highlighted as a crisis nationwide deserving of a deeper commitment from all stakeholders to a shared agenda to end it. As we move through the PHE, we hope that providers, insurers, government decision makers, and hospitals will work to keep patients centered and protected from debt.