Potter: Smoothing out Medicaid's 'churn'
Proposed legislation would prevent eligibility glitches that yank folks in and out of program
Bipartisanship is so rare on Capitol Hill these days, especially in regard to health care, that when such comity breaks out, it’s worth reporting.
Around the time the House of Representatives was voting for the 30-somethingth time to repeal Obamacare, two lawmakers from Texas — Democrat Gene Green and Republican Joe Barton — introduced legislation to fix a problem that most folks with private insurance know nothing about. That’s because it only affects the poorest among us who are eligible for Medicaid.
The problem is referred to by policy wonks as “churn.” Because of the way Medicaid is administered by the states, millions of Americans enrolled in the program lose coverage temporarily every year because of often minor fluctuations in their income or even a change of address. Many are removed from the rolls simply because they can’t take time off from work to go to a Medicaid office to re-verify their incomes every three months, which some states require.
It’s called churn because most people who are “disenrolled” — to use insurance industry jargon — are eventually reinstated. Their eligibility for Medicaid never changed. They lost coverage solely because of paperwork requirements or a slight and fleeting bump in pay because of having to work overtime during a given week.
This is unknown in the private insurance world because once you enroll in a health plan, you can stay enrolled in that plan for a year, so long as you keep paying the premiums on time. It doesn’t matter if you move from one street to another or work an extra shift to make a few extra bucks.
But staying covered for a full year under Medicaid is not a given, and the consequences of this churn are costly, and not just for those most directly affected. The situation is costly to taxpayers, too, because of the unnecessary administrative expense. It costs hundreds of dollars per enrollee to verify income multiple times a year and to process all the paperwork involved in reinstating a beneficiary. When you consider that 58 million of Americans are currently enrolled in Medicaid — a number that will grow substantially next year when many states expand coverage under the Affordable Care Act — billions of taxpayers’ dollars are being wasted because of churn.
Those who fare the worst, though, are eligible beneficiaries who get dumped into the ranks of the uninsured.
“Even short gaps in coverage can lead to delay or avoidance of needed care,” says Leighton Ku, director of the Center for Health Policy Research at George Washington University’s School of Public Health and Human Services, who along with colleague Erika Steinmetz studied the effects of churn. They released their findings in a report last month.
They found that gaps in coverage often lead to significant increases in hospitalization for chronic diseases like diabetes, asthma and mental disorders.
“Churning has a pervasive negative impact on health for low-income Americans,” says Margaret A. Murray, CEO of the Association for Community Affiliated Plans (ACAP), an organization representing health plans serving Medicaid beneficiaries, which commissioned the study. “It stymies the efforts of plans serving Medicaid populations to provide consistent, coordinated care. Worst of all, churning interrupts care for many people and forces them to go to an emergency department rather than their primary care doctor because they don’t have the coverage they thought they had.”
The problem will be even more acute when the states’ online health insurance exchanges, or marketplaces, begin enrolling folks this coming October. Most Americans who do not have coverage will be able to shop for it in these exchanges, which the Affordable Care Act requires states to set up. Murray cites research showing that up to half of the 28 million adults with incomes less than twice the poverty level — an annual income of $22,340 for an individual or $38,180 for a family of three — will have income fluctuations that will require them to switch between Medicaid and private coverage offered through the exchanges in a given year.
“This shift in eligibility may trigger a sudden change in plans and provider networks, which can have serious repercussions for the enrollee’s financial and health status,” says Murray.
What ACAP advocates — which Green and Barton’s bill would achieve — is a guarantee of 12 months of continuous eligibility to everyone with Medicaid. At the end of the 12-month period, eligibility would be re-evaluated. That’s what a few states do now for children enrolled in the program and in their Children’s Health Insurance Programs (CHIP).
The idea has also been endorsed by the Medicaid and CHIP Payment and Access Commission (MACPAC). Other advocates include the Children’s Hospital Association, the National Association of Public Hospitals and Health Systems and the National Committee for Quality Assurance.
If Green and Barton’s bill makes it through Congress — no sure bet considering the gridlock that seems to prevail on Capitol Hill — it would save us all a lot of money and give millions of low-income Americans greater peace of mind.
Reprinted by permission of The Center for Public Integrity.
Following a 20-year career as a corporate public relations executive, Wendell Potter left his position as head of communications for CIGNA, one of the nation’s largest health insurers, to show the world the “dark inner workings” of the insurance industry.