Dhruv Khullar | March 23, 2016
Millions of Americans are finding Obamacare to be unstable ground.
Consider a young construction worker, a patient of mine, whose hours are cut during the winter. His income drops slightly, and now his family no longer qualifies for financial assistance through marketplace subsidies and must sign up for Medicaid. He had finally managed to control his diabetes with his primary care doctor, but when scheduling his next appointment, he is told his doctor doesn’t accept Medicaid.
When the summer rolls around, he picks up more hours, and starts making too much for Medicaid. He has to go back on a marketplace plan, a different one from before. Meanwhile, providers and insurance plans rack up administrative costs as they accommodate these changes.
Because of fluctuations in income, millions of Americans move back and forth between Medicaid and the Affordable Care Act’s insurance marketplace, leading to significant health and financial costs for individuals, states and insurance companies.
This cycling across different forms of insurance is called “churning.” Churning is not a new phenomenon. In the past, people who rolled off Medicaid simply became uninsured. But now many who become ineligible for Medicaid become eligible for marketplace subsidies, and vice versa.
The Affordable Care Act sets the eligibility divide between Medicaid and the insurance marketplace at 138 percent of the federal poverty level, or about $33,000 for a family of four — a threshold at which many people experience substantial income fluctuation. Up to 28 million people may move between plans annually, according to a 2011 study by Benjamin Sommers at Harvard and Sara Rosenbaum at George Washington University. Over the course of four years, only 19 percent of adults will remain continuously eligible for Medicaid and 31 percent continuously eligible for marketplace subsidies. Almost 40 percent will have churned more than four times during this period.
Churning is also costly for taxpayers. Research suggests that average monthly spending on individuals continuously enrolled in Medicaid is two-thirds what it is for those enrolled for just half the year. And the administrative costs can be considerable; one study found that it costs $280 to enroll a child in Medicaid.
What can be done? One option is to require states to guarantee 12 months of continuous eligibility when people sign up for Medicaid. Currently fewer than half of states do this for children and pregnant women, and only New York does it for all adults. An analysis by the Commonwealth Fund found that offering 12 months of continuous Medicaid eligibility would reduce churning by 30 percent. Guaranteeing coverage through the end of the calendar year would reduce churning by nearly 80 percent.
Last year, the Texas representatives Gene Green, a Democrat, and Joe Barton, a Republican, introduced a bill to require states to provide 12-month continuous coverage, a rare demonstration of bipartisanship in the current political climate. Senator Sherrod Brown, Democrat from Ohio, recently introduced a similar bill in the Senate. Neither bill has seen much movement.
Another approach is to smooth the transition between Medicaid and the marketplace plans by aligning plans, benefits and networks of providers. States are increasingly relying on managed-care companies to provide Medicaid benefits; in 2015, the number of Medicaid beneficiaries using private insurance plans reached 46 million. Making sure people can use similar providers and services — regardless of which insurance they technically qualify for at that time — could help.
Nevada, for example, will require Medicaid managed-care companies to sell similar plans in the marketplace. Washington is helping insurers in the marketplaces develop Medicaid managed-care plans. A more direct path is simply to allow Medicaid-eligible populations to buy private plans on the marketplaces. Arkansas is pursuing this strategy, and it has lowered uninsured rates, reduced missed medications and improved regular access to care.
While the patchwork of health care in the United States may make some amount of churning unavoidable, it is possible to create a less wasteful, more unified system that works better for patients and providers.
Source: The New York Times