Experts warn of the effect of Medicaid churn with expanded coverage, addition of subsidized coverage

April 06, 2015

In the Medicaid and the Children's Health Insurance Programs, where eligibility changes depending on income and family size, churning is not uncommon. Adding subsidized health insurance on the exchanges to the process expands the possibilities for churn. According to an analysis by Matthew Buettgens, a senior research associate at the Urban Institute, 7 million people could churn between Medicaid and exchange coverage annually. The health law aims to minimize churning by making the marketplaces a one-stop shop for both types of coverage. Washington made progress in realizing the health law's vision of a single online portal for consumers to enroll in marketplace plans and get financial subsidies or sign up for Medicaid, says Buettgens. Among the other 14 state-based marketplaces, New York, Rhode Island and Kentucky also stand out for their efforts to integrate Medicaid and exchange plan data and information technology, says the director of the State Health Reform Assistance Network. Such integration is more complicated when the federal government is running the state's marketplace, experts say. Now that the exchanges have concluded their first year, most states are just beginning to turn their attention to the problem of churn, experts say, but data is scarce. Some strategies to alleviate the effects of churn include:

  • Ensure people's insurance coverage and provider networks are similar whether they're on Medicaid or an exchange plan;
  • Ensuring Medicaid managed care plans sell comparable plans on the exchange; and
  • Adopting a "basic health program" as permitted under the health law which offers health coverage similar to that on an exchange for people with incomes up to 200% of the federal poverty level.