Inflation Reduction Act may help ease payers' Medicaid losses if public health emergency ends, Fitch says

Payers with large Medicaid operations are expected to face negative pressure on revenues if the federal public health emergency ends in October, but the total impact on profits is likely to be small because of coverage alternatives offered by the Inflation Reduction Act, according to an Aug. 11 analysis Fitch Ratings shared with Becker's.

If the public health emergency is allowed to end October 13, a redetermination process will begin a major disenrollment of Medicaid beneficiaries, likely over the course of a year.

All payers operating Medicaid plans will be affected, but those with higher enrollments are expected to be more impacted. The loss of beneficiaries will be mitigated through the Inflation Reduction Act's extension of ACA premium tax credits through the end of 2025, which will allow some to regain coverage in the individual market.

As of April, total Medicaid and Children's Health Insurance Program enrollment is more than 88 million, up 24 percent since the end of 2019.

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