Study reveals impact of Medicaid unwinding on children's emergency department visits in Texas

As the COVID-19 pandemic wound down, so did the federal government's funding to states that allowed all Medicaid enrollees to keep their coverage even if they no longer would have been eligible otherwise.

This "great unwinding" at the end of March 2023 meant that more than 25 million people-about 30 percent of all Medicaid recipients-were removed from the program.

Now, in the first study of its kind, researchers have analyzed how the unwinding affected the payer mix for children's emergency department visits in Texas. During the unwinding, about 1.2 million children in the state lost health insurance coverage.

Knowing whether payment comes from Medicare, Medicaid, private insurance or the patient is important for health care organizations because it affects their financial bottom line."

Daniel Marthey, PhD, a health policy expert and study author at the Texas A&M University School of Public Health

Commercial insurance pays more than Medicare, while treating uninsured patients increases a hospital's uncompensated care costs and bad debt.

For their study, published in Health Services Research, the team analyzed data on all 7.6 million patients younger than 17 who visited 472 emergency departments in Texas from April 2021 (before the Medicaid unwinding) through May 2024 (after the unwinding).

Other Texas A&M researchers involved in the study were Benjamin Ukert, PhD, with the School of Public Health and Laura Dague, PhD, with the Bush School of Government and Public Service, along with colleagues from the University of Alabama and Penn State University.

"The share of Medicaid-insured visits declined by 7.2 percentage points during the period studied, for a relative reduction of 11.7% from baseline," Marthey said. "In addition, the share of commercially insured patients increased 12.5%, and the share of uninsured visits increased 45.2%."

Further analysis revealed that the shift to commercial coverage happened more immediately following the unwinding, while the increase in uninsured happened with an upward trend over time.

"Understanding the financial implications from the increase in the proportion of uninsured emergency departments visits for children is important to hospitals and the state," Ukert said.

For Texas, the increased share of patients with commercial insurance could help offset the decrease in the Medicaid share. For hospitals that must provide care to more uninsured patients, on the other hand, the increased financial burden could result in a need for assistance from the state, which also would affect the state's budgets.

In addition, a lack of health insurance might lead to delays in children receiving routine health care, which could also increase the need for emergency department visits in the future, especially for the nearly half a million Texas children with asthma.

Small, rural hospitals experienced the biggest declines in Medicaid patients and the largest increases in uninsured patients.

"These hospitals are an important safety net for people in areas underserved in terms of health care access," Ukert said. "Many of them already have low or negative profit margins and risk closure."

A rough calculation showed that while the unwinding led to fewer Medicaid-covered emergency department visits and more uninsured children, the loss in revenue may have been fully offset by higher payments from commercially insured visits. This estimate does not account for other shifts in payer distribution.

Marthey noted that these findings might not apply elsewhere since Texas is one of the more populous states and since Medicaid eligibility and requirements can differ from state to state.

"Our study underscores the need for policies that target transitions to other health programs so that the impact of the loss of health insurance coverage is minimized," he said.