Under the Patient Protection and Affordable Care Act, low- and middle-income adults in all states will likely experience frequent changes in eligibility, or "churning," for Medicaid and health insurance exchange subsidies as their incomes and family circumstances shift, according to a Health Affairs study.
Researchers from the Harvard School of Public Health in Boston, Vanderbilt University School of Medicine, in Nashville, Tenn., and the George Washington University School of Public Health and Health Services in Washington, D.C., examined data from the 2008 Census Bureau Survey of Income and Program Participation, identifying adults ages 19 to 62 who earned 400 percent of the poverty level or less and were therefore considered likely to enroll in Medicaid or subsidized PPACA marketplace coverage through the exchanges.
The researchers estimated family income as a percentage of the federal poverty level for each month in the survey and tracked the number of people experiencing income changes that would result in a shift in insurance eligibility from Medicaid to subsidized exchange coverage or vice versa. The researchers also used data from the 2009 to 2011 American Community Survey, also conducted by the Census Bureau, to construct state-specific weights for the SIPP sample.
For the purposes of estimating rates of churning, the study assumed a scenario in which all states expand Medicaid to cover those earning up to 138 percent of the federal poverty level, although the researchers note only 25 states and D.C. had elected to expand Medicaid as of January 2014. Subsidies to help cover the cost of health plans sold through the exchanges are available in all states to those earning 400 percent of the poverty level or less.
Across all states, an estimated 63 to 72 percent of adults wouldn't have experienced any changes in eligibility through the first six months analyzed, and, in most states, 40 to 55 percent of adults wouldn't experience churning during the full year, according to the study. Still, the researchers estimate approximately half of adults likely to be eligible for Medicaid or subsidized marketplace coverage would have experienced an eligibility change within the year. Hawaii and Maine would have experienced more churning at the year mark than the other states, with only 40 percent and 42 percent of adults, respectively, showing stable eligibility. However, they showed relatively high stability rates at six months (70 percent and 67 percent, respectively).
Overall, however, the researchers wrote, "Our findings indicate that every state is likely to experience significant rates of eligibility changes over time." That conclusion has significant implications for providers as well as patients, according to study co-author Benjamin Sommers, MD, PhD, an assistant professor of health policy and economics at the Harvard School of Public Health.
"When patients change insurance due to these types of eligibility changes, they may end up in new provider networks and have to lose existing relationships with their providers," he says. "In other cases, they may keep their providers, but experience changes in benefits such as their drug formulary, and have to alter existing treatment plans."
According to the study, states can reduce churning by enacting various policy changes, such as a 12-month continuous eligibility period for Medicaid to eliminate eligibility changes resulting from periodic income fluctuations. They can also assess ongoing Medicaid eligibility using projected annual income instead of current monthly income or use Medicaid funds to subsidize private coverage for low-income residents, among other measures.
According to Dr. Sommers, hospitals, health systems and other providers can also help stabilize their patients' eligibility for coverage. "One step providers can take is to advise patients on these potential transitions so that patients if possible can select plans that participate in both Medicaid and the marketplace," he says. "That way, if they do have a change in eligibility, they can at least stay with the same insurer, reducing the likelihood of disruptions in relationships with providers or ongoing treatment plans."
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