The Affordable Care Act (ACA) requires almost all Americans to have health insurance. For most lower-income Americans, this means coverage through Medicaid, employer-sponsored insurance, or health exchanges, depending on their income and state of residence. Approximately half of all low-income, non-elderly Americans experience a change of income or family circumstance in a given year, which may result in an involuntary shift in how they are covered from health insurance purchased through an exchange to Medicaid — or vice versa. This process, called “churning,” could lead to both gaps in coverage and disruptions in the continuity of care.
A new study released today as a Web First by Health Affairs provides state-by-state estimates of churning. Using data from two Census Bureau sources — its 2008 Survey of Income and Program Participation, and American Community Surveys from 2009–2011 — Benjamin Sommers, John Graves, Katherine Swartz, and Sara Rosenbaum found that every state is likely to have significant numbers of residents whose eligibility changes over time: at least 40 percent of eligible adults over the course of twelve months. They observed that higher-income states and states with more generous Medicaid eligibility criteria in place before the ACA’s expansion experienced a higher rate of churning, although differences between states were small. (The authors’ analysis assumes that all states had expanded Medicaid under health reform. At the moment, twenty-five states and the District of Columbia have done so.)
The authors describe various available policy options to mitigate the effects of churning: new ways to demonstrate Medicaid eligibility, such as twelve-month continuous eligibility periods, or projecting annual income instead of monthly income filings. “The transition issues raised here will require attention in the coming years, and our key conclusion is that every state will need to address them,” conclude Sommers and his colleagues. “Reducing such churning will greatly increase the likelihood of stable coverage and improved quality of care under the Affordable Care Act.”
Sommers and Swartz are affiliated with Harvard School of Public Health in Boston; Graves is with Vanderbilt University in Nashville; and Rosenbaum is affiliated with The George Washington University in Washington, DC. The study, which was funded by the Agency for Healthcare Research and Quality, will also appear in the April issue of Health Affairs.