Health Insurance Report™ helps you track and analyze legal, legislative, and regulatory developments affecting the health-insurance industry throughout implementation of the Affordable Care Act...
When Medicaid expansion and state health insurance exchanges go into effect in 2014 as part of health care reform, as many as 28 million people will find their health insurance coverage disrupted, according to a study in the February issue of the journal Health Affairs.
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.
In their study, co-authors Benjamin Sommers, assistant professor of health policy and economics at the Harvard School of Public Health, and Sara Rosenbaum, chair of the Department of Health Policy, School of Public Health and Health Services at the George Washington University, stated that low-income Americans' eligibility for care will change when their income shifts--causing them to “churn” between Medicaid and subsidized coverage through the new state health insurance exchanges.
Churning disrupts both coverage and care while potentially increasing administrative costs, the authors said in the article, “Issues in Health Reform: How Changes in Eligibility May Move Millions Back and Forth Between Medicaid and Insurance Exchanges.”
The law specifies no minimum enrollment period, and subsidy levels also will change as income rises and falls, the article said. Using national survey data, the authors estimated that within six months, more than 35 percent of all adults with family incomes below 200 percent of the federal poverty level will experience a shift in eligibility from Medicaid to an insurance exchange, or the reverse; within a year, 50 percent, or 28 million, will.
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, the study found. In all, 38 percent will have churned four times or more.
“The income-sensitive approach to subsidizing health insurance creates issues for people near the eligibility cutoff,” Sommers said in a statement. “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.”
The authors noted 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 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.
To minimize the effect on continuity and quality of care, the study suggested that states and the federal government should adopt strategies to reduce the frequency of coverage transitions and to mitigate the disruptions caused by those transitions. Some options, the study said, include establishing a minimum guaranteed eligibility period and “dually certifying” some plans to serve both Medicaid and exchange enrollees.
The study can be found at http://op.bna.com/hl.nsf/r?Open=nwel-8dqu2l.
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