Income fluctuations among people who will become eligible for subsidized health insurance under the Affordable Care Act could disrupt coverage for as many as 28 million adults within the first twelve months, as their eligibility shifts between Medicaid and the new state health insurance exchanges, according to a new study published in the February 2011 Health Affairs.
The study is one of several in this month’s Health Affairs that explore in depth some of the most significant challenges to implementing health reform, including lack of access among people who can’t afford out-of-pocket costs, the need for better coordination among components of local safety net systems, and persistent disparities in access to health care for socially disadvantaged patients.
In 2014, Medicaid coverage will be extended to all nonelderly citizens whose family income does not exceed 133 percent of the federal poverty level, while subsidized coverage through state health insurance exchanges will be offered to those not eligible for Medicaid with incomes up to 400 percent of the federal poverty level.
“The income-sensitive approach to subsidizing health insurance creates issues for people near the eligibility cutoff,” says Benjamin Sommers, an assistant professor of health policy and economics at the Harvard School of Public Health, who coauthored the study with Sara Rosenbaum, the Hirsh Professor and chair of the Department of Health Policy in the School of Public Health and Health Services at the George Washington University. “Because there’s no minimum enrollment period, eligibility and subsidy levels will change as income rises and falls—disrupting both coverage and care while potentially increasing administrative costs.”
In fact, income changes could lead to the “churning” of millions of adults and their families between Medicaid and the state exchanges, often within months of their initial enrollment in the programs. Not only might these Americans experience gaps in coverage, but the moves could also trigger changes in their health plans and provider networks.
Sommers and Rosenbaum used national survey data to calculate churning among people initially eligible for Medicaid and those initially eligible for exchange coverage when the relevant provisions of health reform take effect in 2014. They estimate that more than 35 percent of adults with family incomes below 200 percent of the federal poverty level will experience a change in eligibility within six months, and 50 percent will experience a change within one year. In addition, 24 percent will churn at least twice within a year, and 39 percent will experience such churning within two years.
By the end of four years, only 19 percent of adults initially eligible for Medicaid will have been continuously eligible, while only 31 percent of adults eligible for exchange subsidies will have remained continuously eligible. In all, 38 percent will have churned four times or more.
The researchers note that many people who will experience churning will have incomes low enough to exempt them from the federal insurance mandate, which means that fatigue with frequent coverage changes could lead them to simply abandon insurance over time. This group includes millions of healthy adults whose participation is crucial to having robust risk pools, in which the costs of a minority of sick individuals can be spread throughout a far larger group that is healthier overall. Income changes were more common among adults who were younger, more educated, and white—characteristics that correlate with better health.
Sommers and Rosenbaum recommend several strategies at the federal and state levels to minimize churning and promote the quality and continuity of care:
- Establish a minimum guaranteed eligibility period, a strategy that has been used by some state Medicaid and CHIP programs to reduce churning.
- Create support services to address churning by ensuring that people have a way to report real-time income changes that could affect their eligibility.
- Align coverage and benefits between Medicaid and the insurance exchanges.
- Align exchange and Medicaid plan markets and provider networks.
Other Health Reform Implementation Challenges
Does coverage translate to access for all groups? How well does near-universal coverage address lack of access due to costs in diverse groups in Massachusetts? A study by Cheryl Clark, of Brigham and Women’s Hospital, and colleagues found that nearly a quarter of Massachusetts adults in fair or poor health reported being unable to see a doctor because of cost during the implementation of state health reforms.
Although some groups—men, non-Hispanic whites, those with low and high incomes, and people in good or excellent health —saw modest reductions in unmet needs, others did not. In addition, people earning less than $25,000 a year were much less likely than higher earners to get screening for cardiovascular disease and cancer. The authors call for policy actions that reduce access barriers faced by people in fair or poor health, along with better and more explicit monitoring of trends in diverse groups to assess the benefits of health reform and identify where further intervention is needed.
From safety net to Healthy San Francisco. National health reform will bring profound changes to local safety net systems. Mitchell Katz and Tangerine Brigham evaluated San Francisco’s experience transforming its traditional safety net into a comprehensive health care program, Healthy San Francisco. Katz and Brigham have served in the City and County of San Francisco’s Departments of Public Health. (Katz is now director of health services for the County of Los Angeles.) They suggest that safety net providers should invest in information technology, establish primary care homes, increase coordination of care, and boost customer service as reform is implemented.
Although Healthy San Francisco is only for the uninsured, it incorporates features of managed care, such as primary care homes, linkage to specialty care and hospitalization, prepaid program fees, and customer service. Its model of a local municipality creating a non-insurance-based care network could be applied by other municipalities, the authors write. Results to date indicate high enrollee satisfaction with the program, a low number of unnecessary emergency visits, and low administrative costs.
Access and disparities. Universal access to care does not eliminate health disparities for people in disadvantaged groups, according to a study of 14,800 patients with access to Canada’s universal health care system by David Alter and colleagues at the Institute for Clinical Evaluative Sciences, in Toronto. Patients involved in the study were all initially free of cardiac disease; they were tracked for at least ten years. The researchers found that patients from disadvantaged groups used health care services more than their wealthier and more educated counterparts—because they were sicker. However, greater use of health care services by people from disadvantaged groups did not translate into better outcomes, particularly with respect to mortality.
The researchers speculate that continuing health disparities may be due to factors outside the medical care system, such as poorer diets, lower levels of physical activity, and higher levels of smoking. They suggest that better methods for delivering preventive care and health education and counseling may help address these disparities.