Medicaid And Marketplace Eligibility Changes Will Occur Often In All States; Policy Options Can Ease Impact

Abstract

Under the Affordable Care Act (ACA), changes in income and family circumstances are likely to produce frequent transitions in eligibility for Medicaid and health insurance Marketplace coverage for low- and middle-income adults. We provide state-by-state estimates of potential eligibility changes ("churning") if all states expanded Medicaid under health reform, and we identify predictors of rates of churning within states. Combining longitudinal survey data with state-specific weighting and small-area estimation techniques, we found that eligibility changes occurred frequently in all fifty states. Higher-income states and states that had more generous Medicaid eligibility criteria for nonelderly adults before the ACA experienced more churning, although the differences were small. Even in states with the least churning, we estimated that more than 40 percent of adults likely to enroll in Medicaid or subsidized Marketplace coverage would experience a change in eligibility within twelve months. Policy options for states to reduce the frequency and impact of coverage changes include adopting twelve-month continuous eligibility for adults in Medicaid, creating a Basic Health Program, using Medicaid funds to subsidize Marketplace coverage for low-income adults, and encouraging the same health insurers to offer plans in Medicaid and the Marketplaces.

Insurance Churning Rates For Low-Income Adults Under Health Reform: Lower Than Expected But Still Harmful For Many

“…Another possible explanation is that pre-ACA projections typically assumed that monthly fluctuations in income would be reported promptly and acted upon by states as required by law, 8,9 but in practice, individuals may not report such changes and states may be slow to respond. The Centers for Medicare and Medicaid Services (CMS) also gave states the option of delaying the annual eligibility redetermination process in Medicaid for 2014, and more than 2/3 of states chose to do so.…”

“…5 Previous research indicates that even before the ACA, churning was a common phenomenon, with annual rates of coverage disruptions estimated at 12% for those with employer-provided insurance, 6 43% in Medicaid, 2 and 58% in non-group private insurance. 7 Multiple analyses projected that churning would be a major challenge under the ACA in all states, [8][9][10] but there has been limited evidence to date on actual churning since the law's coverage expansions took effect.…”

Mitigating the Effects of Churning Under the Affordable Care Act: Lessons from Medicaid

“…1 This problem is likely to occur in all states-not only those expanding Medicaid-as enrollees' work, family, and life changes lead to movement across the three major public-subsidy programs (Medicaid, the Children's Health Insurance Program, and the insurance marketplaces). 2 For this reason, greater alignment of the various pathways to affordable coverage will be an important step in the ACA's evolution. The challenge of the ACA's churning effect is complicated by the fact that each of these public-subsidy programs has its own rules and standards for participating health plans, as well as its own network of participating plans: managed care plans in Medicaid, qualified health plans in the marketplaces, and child health plans in the Children's Health Insurance Program (CHIP) (Exhibit 1).…”

Young Adults Changing Insurance Status: Gaps in Health Insurance Literacy

“…Changes or disruptions in insurance coverage-"churning"-often occur due to transitions in employment, income, college status, or family structure [2][3][4]. As many of these life transitions are associated with young adulthood, young adults are at greater risk of interruptions in health insurance coverage than other age groups [5,6].…”

“…California's uninsured rate dropped to a historic low, from 17.3% in 2013 to 7.4% in 2016 [37,38]. Yet California ranked in the top 5th percentile for states with the highest rate of churning [4], making it an ideal learning laboratory to gain insights about this issue. Researchers solicited observations from experts in health insurance coverage and access to care among young adults in California.…”