Closing Health Coverage Gaps: The Impact of Enrollment and Retention Policies

Abstract

• Issue: The Affordable Care Act (ACA) includes policies that help people get and retain health coverage. These and subsequent laws and regulations have helped the United States achieve a coverage rate of 92 percent. Recent changes, however, could reverse this progress.
• Goal: To review evidence on the effectiveness of enrollment and retention policies in the ACA and later laws and rules, as well as recent changes that could potentially narrow or increase gaps in coverage.
• Methods: Analysis of administrative data, analyses by nonprofits, and policy documents.
• Key Findings and Conclusions: Gaps in health coverage have declined but will likely increase in 2026 due to recent policy changes. Beyond reversing such policies, options to shrink gaps include implementing continuous eligibility for people with low incomes, simplifying eligibility rules, and creating a nationwide eligibility system.

Introduction

Compared to those who are uninsured, people with health coverage tend to live longer, healthier lives — both in terms of clinical outcomes and self-reported health — and have greater financial security.¹ Health insurance also, among other effects, improves learning, worker productivity, and the economy, as coverage reduces poverty.²

The Affordable Care Act (ACA), enacted in 2010, included policies to make health coverage more accessible and affordable, such as health insurance marketplaces, guaranteed availability of private health insurance, marketplace premium tax credits, and Medicaid expansion. It also included policies to improve enrollment and retention of coverage, eliminating needless denials, delays, and discouragement.

The ACA’s major programs covered an estimated 44 million people in 2024: 21.4 million through the health insurance marketplaces, 21.3 million through Medicaid, and 1.3 million through the Basic Health Plan.³ The ACA contributed to record-high coverage rates in 2022, 2023, and 2024.⁴ That said, 9 percent of nonelderly adults were uninsured at some point in 2024, and an additional 12 percent of those who were insured when surveyed had been uninsured in the past year.⁵

In this brief, we examine what is known about gaps in health coverage; the impact of enrollment and retention policies in the ACA and beyond; what recent policy changes, including those in the budget reconciliation law (the One Big Beautiful Bill Act), could mean for coverage; and proposals to reduce coverage gaps. We offer the perspective of individuals involved in the development and evolution of the ACA, as well as health coverage policies later implemented by the Biden administration.⁶

Trends and Gaps in Health Coverage

The percentage of people experiencing coverage disruptions declined after passage of the ACA.⁷ According to the Commonwealth Fund Biennial Survey, the percentage of uninsured adults who reported being uninsured for a year or longer dropped from 57 percent in 2012 to 31 percent in 2018, and the percentage with any gap in coverage in the past year dropped from 29 percent to 22 percent (Exhibit 1).⁸ The average number of nonelderly people with a gap in coverage over two years dropped from 20 percent in 2007 and 2008 to 12.5 percent in 2018 and 2019.⁹ However, studies suggest that the risk of an insured person becoming uninsured has not significantly changed.

Causes of Coverage Gaps

More than 60 percent of uninsured people are eligible for coverage with some type of subsidy (Exhibit 2).¹⁰ Some enrollment barriers for eligible individuals are policy-driven, such as limited opportunities to sign up for or renew coverage. Other reasons for coverage gaps are administrative and process related. For example, some state Medicaid systems do not simply or automatically verify eligibility, requiring paperwork that may act as a barrier to coverage.¹¹ Additionally, some eligible people choose to remain uninsured, seeing coverage as having low value or being too expensive despite the subsidy.¹² However, of the remaining 40 percent of uninsured people not eligible for an existing subsidy, the largest percentage are workers whose employer insurance is unaffordable. Additionally, some uninsured people would have coverage if their states expanded Medicaid eligibility as allowed by the ACA.

Consequences of Coverage Gaps

Even short coverage gaps can be harmful. Individuals who experience coverage disruptions refill prescriptions less and have more hospitalizations and emergency room visits than those with continuous coverage.¹³ Compared to those with year-round coverage, young adults with gaps in coverage as children were less likely to report good health and use preventive care, and more likely to report health limitations on the kind or amount of work they can undertake.¹⁴

Churning in and out of coverage also increases costs. In Medicaid, frequent shifts between enrollment, coverage gaps, and reenrollment create significant administrative costs and frustration for beneficiaries.¹⁵ Pent-up demand and delayed care during gaps in coverage lead to greater use of more expensive health services, such as emergency visits, for nonurgent or preventable health problems. The Congressional Budget Office (CBO) estimates that half or more of the upfront cost of providing continuous coverage for children would be offset by savings from the long-term benefits of healthier and more productive adults.¹⁶

Changes to Enrollment and Retention Policies in the Past 15 Years

Between March 2010, when the ACA was enacted, and March 2025, various policies have both undermined and catalyzed progress toward universal coverage (Exhibit 3).

The most well-known setback is the 2012 Supreme Court decision that the ACA’s Medicaid expansion to all adults with incomes below 138 percent of the federal poverty level (FPL) was optional for states. Others include President Trump’s administrative actions to roll back ACA policies, such as ending funding for reduced cost sharing for low-income marketplace enrollees and outreach and enrollment efforts.¹⁷

In contrast, the COVID-19 public health emergency, which spanned the Trump and Biden administrations, led to unprecedented efforts to prevent people from becoming uninsured. Most notably, from March 2020 to April 2023, states implemented continuous Medicaid coverage, which suspended involuntary disenrollment due changes in eligibility (such as changes in income) and reduced “churning” in and out of the program.¹⁸

During and after the pandemic, the Biden administration implemented policies to facilitate enrollment and reenrollment in Medicaid and marketplace plans.¹⁹ Among these were increasing marketplace premium tax credits and allowing year-round enrollment for eligible people with incomes below 150 percent of FPL. This facilitated gap-free transitions from Medicaid to the marketplace as verification and system changes were underway. The administration’s continuous coverage policies for Medicaid included:

• Required 12-month continuous eligibility for children in all states
• A new option for 12 months of postpartum coverage, which 49 states adopted²⁰
• Section 1115 demonstration waivers in 12 states that test whether longer continuous coverage improves health outcomes and lowers administrative costs.²¹

These efforts helped prevent predicted postpandemic coverage loss in the United States.²²

2025 Policy Changes Affecting Enrollment and Reenrollment in Coverage

With the stated goal of curbing spending, preventing fraudulent enrollment, and reducing bureaucracy, policymakers have finalized regulatory and legislative policies in 2025 that, according to the CBO, will increase the uninsured population (Exhibit 4).²³ They also will reduce federal spending and revenue by over three-quarters of a trillion dollars over the next decade.

In addition to policies reducing subsidies like premium tax credits, policies included in the congressional budget reconciliation law add requirements and limit opportunities to sign up for and maintain health coverage.²⁴ This includes mandatory work reporting requirements to access Medicaid, which have proven to increase administrative inefficiency and reduce the number of people covered without increasing employment.²⁵ The legislation also requires states to reverify eligibility for the ACA Medicaid expansion enrollees every six months. Other policies will increase ACA marketplace premium tax credit verification requirements prior to eligibility and end automatic reenrollment through preverification requirements — all of which are likely to decrease enrollment of eligible individuals and increase insurance premiums.²⁶

In addition to the new legislation, the Trump administration has issued rules and guidance that tighten enrollment and reenrollment processes. On June 20, 2025, it finalized a rule that will limit marketplace enrollment opportunities — by, for example, shortening the open enrollment period — increase verification requirements during special enrollment periods, and add steps to the enrollment process. By the administration’s own regulatory impact analysis, these changes will reduce enrollment by 2.8 million people.²⁷ Further guidance issued on July 17, 2025, will disenroll individuals who appear to be enrolled in Medicaid and marketplaces after 30 days’ notice and end approval of demonstration waivers that allow for continuous Medicaid eligibility.²⁸

Policies to Get and Keep People Covered

Policymakers and program administrators have three main pathways for improving health coverage enrollment and retention.

Making Eligibility Continuous for People with Low Incomes

People with low incomes tend to have greater income fluctuations and are more likely to have breaks in coverage than those with high incomes.²⁹ Maintaining their coverage may be the most important option to limit churning of coverage. This could be addressed in two ways:

• Extending Medicaid’s continuous coverage requirement to adults. One analysis found that providing 12 months of continuous eligibility for Medicaid to nonelderly adults would increase enrollment by over 450,000 and save households and employers $2 billion and reduce total health care spending by $1.8 billion annually, all at a relatively low cost to the public.³⁰
• Autoenrolling people transitioning from Medicaid to the marketplace. Eligible people losing Medicaid due to increased income could be automatically enrolled into marketplace plans until the next open enrollment period, with no reconciliation of the tax credit for that year. This would prevent coverage loss during transitions while ensuring people transitioning from Medicaid have coverage and are treated like other enrollees starting in the next annual renewal process. With simpler eligibility rules, autoenrollment could have broader applications to low-income people or even all eligible residents.³¹ Designing the system to check eligibility using secondary data sets can address concerns about fraudulent or erroneous enrollment.

Simplifying and Aligning Enrollment Rules for Different Coverage Options

Policymakers could align rules for eligibility, verification, and timing of coverage to reduce coverage gaps while ensuring program integrity. Examples of such policies include:

• Using the same definitions for eligibility in the marketplace and Medicaid. This includes what counts as income, family compensation, and immigration status. While coordination was advanced through the ACA and subsequent policies, additional alignment would help prevent duplication and inadvertent gaps in coverage.
• Filling in eligibility gaps in the marketplace and Medicaid. Given low-income workers often struggle to afford employer coverage, eliminating the ACA’s “firewall,” which prevents workers with affordable employer-sponsored insurance from receiving premium tax credits, could help bridge coverage gaps. For example, the 2015 policy for qualified small business health reimbursement accounts (HRAs) could be amended to ensure workers getting employer funds to buy marketplace coverage receive either the tax benefit of the HRA or the tax credit, whichever is more beneficial to them.³² Additionally, eliminating the lower eligibility limit (100% of FPL) for the premium tax credit while maintaining the ACA’s Medicaid expansion could fill the coverage gap created by some states’ inaction.³³ An estimated 1.4 million people are in the coverage gap, making this arguably the most effective of the proposals at reducing uninsurance.³⁴
• Extending the end date of coverage to allow more time to enroll in new coverage. Public and private coverage, including employer contributions for premiums, could continue until the first day of the month that comes 30 days or longer after termination, limiting disruptions associated with changing types of insurance. Preventing disenrollment is simpler than speeding up new enrollment. Coupled with improved efficiency in eligibility determinations for new coverage, extending coverage could limit the need for “presumptive eligibility” in Medicaid, which requires some degree of duplicative work. It also could prevent coverage gaps given the recent budget reconciliation law that changed the retroactive Medicaid eligibility limit from three months to one month.

Creating a Single, Nationwide Eligibility System

The HealthCare.gov platform, which currently serves as the marketplace platform in 31 states, could be adapted for:

• Determining and renewing Medicaid eligibility. HealthCare.gov already performs this function for a subset of states and enrollees, and expanding this capacity would eliminate the need for each state to develop its own system for people whose eligibility is the same in all states.
• Replacing state-based marketplaces. States could retain functions that facilitate enrollment as well as add on to the federal system, but platforms that are not optimally designed for seamless coverage determinations could be replaced.

A single, nationwide eligibility platform would go a long way toward the goal of “no wrong door to coverage.” It also is preferable to outsourced enrollment systems whose complexity exceeds consumer benefits.³⁵

Conclusion

Enrolling people in health coverage, and keeping them covered, requires particular attention in a system with multiple sources of health insurance. Alongside aligning eligibility policies and systems, policies that make coverage affordable and encourage people to get and use coverage are critical. Recent changes have added complexity to eligibility policies and systems with the stated goal of increasing program integrity.

However, these changes rest on the assumption that additional “hoops” for enrollment will be effective, with little proof, while discounting the cost of eligible individuals losing coverage in the process. Millions of uninsured people could be covered today with improved enrollment and retention systems without adding to waste, fraud, or abuse.