As the coronavirus pandemic upends the U.S. economy, the Medicaid health insurance program for people with low incomes could see a significant increase in enrollment and become a crucial part of the country's response to the crisis.

The U.S. saw over 16 million jobless claims as the pandemic intensified during March and April, and the unemployment rate increased from 3.5% to 4.4% last month, the single largest one-month jump since January 1975.

While it is too early to project exact numbers, Medicaid enrollment will rise over the coming months as people who have lost jobs turn to the program for health insurance coverage, Robin Rudowitz, co-director of the program on Medicaid and the uninsured for the Kaiser Family Foundation, a nonpartisan health policy organization, said in an interview.

Medicaid enrollment should increase substantially due to the effects of the pandemic, providing individuals and families with a "lifeline ... as they face what's going on today," said Edwin Park, a research professor at Georgetown University's McCourt School of Public Policy.

Both Rudowitz and Park said enrollment could jump higher than it did during the Great Recession because more people are now eligible under the Affordable Care Act's Medicaid expansion, which took effect in most states in 2014 and broadened Medicaid eligibility.

Between the end of 2007 and the end of 2009, Medicaid enrollment rose by almost 6 million people, according to Park.

Health Management Associates Inc., a healthcare consulting firm, estimated in an April 3 model that the pandemic could cause the unemployment rate to jump between 10% and 25%. Using this range, the firm projected that Medicaid enrollment could increase by 10.6 million to about 23 million over the next several months.

Medicaid is already one of the largest payers in the U.S., covering nearly 64 million people in December 2019, according to the U.S. Centers for Medicare and Medicaid Services. The Children's Health Insurance Program, through Medicaid as well as separate programs, covered another 6.7 million people in the same month.

The CMS projected that Medicaid spending totaled $621 billion in 2019.

The potential spike in the Medicaid population would come after the Trump administration spent years supporting policies that limit Medicaid coverage and spending, including work requirements. The policy was struck down multiple times by a federal district court and once by a federal appeals court for violating the principles of Medicaid by limiting coverage.

Utah, the only state to have work requirements in effect in 2020, announced April 3 that it would temporarily suspend its policy.

Park said restricting Medicaid would prevent the program from making "the downturn less steep, less protracted."

There are at least 557,590 confirmed U.S. cases of COVID-19, the respiratory disease caused by the coronavirus, and at least 22,109 confirmed deaths in the U.S. as of April 13, according to a tracker from Johns Hopkins University's Center for Systems Science and Engineering.

Section 1135 waivers

As the pandemic continues to accelerate in the U.S., federal and state governments have quickly enacted temporary changes to Medicaid.

Medicaid is more flexible than other payers, allowing for tailored and swift responses to public health emergencies like the coronavirus pandemic, said Joe Weissfeld, director of Medicaid initiatives for Families USA, a nonpartisan health policy organization.

"Medicaid is designed in a way to be nimble for exactly these types of situations," Weissfeld said.

One way the CMS has approved program changes to state programs is through section 1135 waivers, which allow the agency to change Medicare, Medicaid and the Children's Health Insurance Program when a national emergency is declared.

Forty-nine section 1135 waivers have been approved as of April 7, including waivers for the District of Columbia and the U.S. Virgin Islands, according to the agency. The waivers are primarily for healthcare providers and ease regulations like prior authorization requirements and enrollment requirements for providers that want to participate in a state's program for the first time.

Weissfeld said the waiver approvals have been fairly "cookie-cutter" and do not reflect everything states are asking for.

For example, Washington's waiver request outlined over 40 Medicaid-specific provisions, among other requests. However, the CMS only cleared a handful of major changes in its March 19 approval letter. Washington was the second state to have a waiver approved, and many of its provisions were reflected in subsequent state waivers.

California's waiver request also had multiple provisions that the CMS did not approve .

More complex requests may need a longer review time and could be granted at a later date, Weissfeld said.

Melanie Bella, chairman of a congressional Medicaid advisory committee, said during an April 2 meeting that there needs to be more transparency regarding waiver approvals to ensure that states are not being denied reasonable requests.

The CMS has temporarily waived a long-list of requirements and payment policies for hospitals, as well as for telehealth services. The agency has also approved temporary changes through other state waivers, including seven coronavirus-related Medicaid disaster amendments as of April 9.

Increasing funds, possible expansion

Congress has also propped up the Medicaid program as part of its response to the pandemic.

In the Families First Coronavirus Response Act, Congress approved a 6.2 percentage-point increase to states' federal medical assistance percentages, or FMAP, the rate at which the federal government matches a state's Medicaid spending. States' FMAP rates vary between a low of 50% and a high of 77.8% for fiscal year 2021, according to the Kaiser Family Foundation.

Weissfeld, Rudowitz and Park agreed that the increase is probably not enough given the burden Medicaid is going to experience and said Congress may raise the rate further.

During the Great Recession, states received the same FMAP increase plus additional funds based on states' unemployment rates, making the overall increase "much higher than 6.2%," Park said.

He added that in order to get the additional funding, states cannot cut back eligibility standards or make it harder to enroll in the program.

The Families First bill, which President Donald Trump signed March 18, also requires Medicaid to cover COVID-19 testing and treatment for recipients with no cost-sharing and has an option for states to cover COVID-19 testing for people who are uninsured.

The pandemic may influence some states that are considering Medicaid expansion to pass the legislation, like Kansas, according to Rudowitz.

Weissfeld said expansion is a way for states to cover people who would otherwise be uninsured and also help struggling hospitals and providers receive payments for more services.

"Non-expansion states have such a big opportunity in front of them to bypass some of the politics that they've been mired in and say, this is the quickest way to turn on health insurance for as many people as possible," Weissfeld said.