Thanks to the Affordable Care Act (ACA), 20 million people have gained health insurance coverage, creating a pathway to better health. However, holding on to that coverage is not always easy and barriers remain for many consumers. Even with the ACA, low-income individuals and families remain at risk of losing their coverage or cycling between different types of coverage—known as churn. Changes in income, employment status or family composition may all result in churning between types of coverage and/or becoming uninsured.
New research on churn
Earlier this month, a new study published in Health Affairs demonstrated the effect of churn across three different states: Kentucky, Texas and Arkansas. Each state has taken a different approach to coverage: Kentucky implemented a straight Medicaid expansion, Texas chose not to expand Medicaid and created a coverage gap, and Arkansas implemented a premium support model that uses its Marketplace to deliver coverage to newly eligible consumers under 138 percent of the Federal Poverty Line (FPL). The data yield interesting results that require further inspection.
The good news is that churn is not as bad as originally predicted. Only a quarter of consumers surveyed experienced a change in their coverage over the last 12 months; prior research estimated that 50 percent of consumers would experience a coverage change in a calendar year. When we look a little closer, some interesting themes emerge. For example, churning was roughly twice as common among those with Marketplace coverage or non-group private coverage, compared to those with Medicaid−consumers mostly cited job changes as the reason for these coverage changes. Additionally, some populations appear to cycle off of coverage more than others. For example, women and younger adults experience coverage changes more than men and older adults, on average. Furthermore, churn is less common among Latinos than among whites.
Figure 1. Illustration of Churn and Some Data Highlights.
Addressing churn should be a priority.
While the ACA moves us toward increased opportunities for coverage, challenges remain for individuals maintaining coverage. Clearly, churn has serious health impacts on low-income people. When cycling in and out of coverage, people are forced to switch plans that result in changes in their doctor, disruptions in medical care, interruptions in patient-provider relationships and complications with access to medications. At least 13 percent of those who churned had to change at least one provider, 22 percent skipped doses or stopped taking prescription medications and 29 percent reported an overall harmful effect on the quality of their health care. Those who churn with gaps in coverage experience the worst health outcomes as they delay seeking routine care, skip needed treatments or stop taking prescription medications altogether. These findings affirm that mitigating gaps in coverage is vital to better health outcomes and that states need to do more to ensure continuity of care for those who transition between coverage types.
Finally, there are the financial implications for states. The administrative costs associated with dis-enrollment and re-enrollment is much higher than the costs associated with enrollment procedures and processing for new enrollees. States also incur increased costs associated with overuse of emergency rooms for minor health conditions by individuals with gaps in coverage as well as costs associated with unmet health needs that become exacerbated when people go without needed treatment.
Some states are making progress.
Churn is driven by a multitude of factors. For that reason, policy solutions must be tailored to a state’s specific challenges. A number of states have taken actions to minimize the frequency and adverse effects of churn on low-income individuals and families. However, many states do not proactively report data to identify and monitor churn and its impacts—particularly on people of color.
As we contemplate next steps to build on the progress of the ACA, there is an opportunity for consumer advocates to work with their state policymakers and stakeholders to develop a model for estimating churn and a plan of action to support consumers in keeping their coverage. As we approach the Fourth Open Enrollment Period, enrollment specialists have an important role to play in helping consumers understand their insurance options, responsibility to enroll and how to keep their coverage. Stay tuned for upcoming resources!