By Rebecca Adams, CQ HealthBeat Associate Editor
March 12, 2014 -- The problem of churning, in which individuals' eligibility for government-financed health programs such as Medicaid or new health law marketplace plans changes over the course of a year, is likely to be "a major challenge for every state," according to a recent Health Affairs study.
Consumers may have to change their coverage—and in some cases, their doctors—midway through the year if their income rises or falls unless state officials intervene.
The District of Columbia is expected to have the most churning, and Mississippi is expected to have the least, according to the report by researchers from the Harvard School of Public Health, Vanderbilt University School of Medicine and the George Washington University School of Public Health and Health Services. In general, the authors found that richer states with lower poverty rates and higher per capita incomes were likely to experience more churning between Medicaid and the marketplace plans.
About half of adults that are eligible for Medicaid or subsidized marketplace coverage could face an eligibility change within a year, according to the authors.
Consumers in some states that don't expand Medicaid could find themselves without coverage at all if their income falls below the federal poverty level, which is the threshold for obtaining subsidized marketplace coverage. States that have not expanded Medicaid often do not have any government-financed coverage available for non-disabled, childless adults at that income level.
The authors examine a series of policy prescriptions that could allow consumers to have more continuous coverage.
State officials could adopt 12-month continuous Medicaid eligibility periods or temporarily allow continuous coverage when people are trying to re-enroll, as a way of overcoming the effects of income fluctuations. States also could choose to assess people's eligibility for Medicaid using projected annual income instead of current monthly income. A third option is to use Medicaid funds to buy coverage through marketplace plans for people with incomes below 138 percent of poverty, a solution officials in Arkansas, Iowa and Michigan have embraced with the federal government's blessing.
The authors noted that states also could create a Basic Health Program, an option under the health care law (PL 111-148, PL 111-152) that allows Medicaid expansions to be combined with marketplace subsidies into a single program for individuals and families with incomes of up to 200 percent of the poverty level.
States could also encourage Medicaid managed care plans to offer coverage in state marketplaces.
"Reducing such churning will greatly increase the likelihood of stable coverage and improved quality of care," wrote the authors.