What is eligibility “churn”?
“Churn” is an on-and-off-and-on pattern of enrollment that is often unrelated to actual eligibility status or may be due to small, often short-term, changes in income. These income fluctuations can be the result of seasonal employment, receiving a few extra hours at work, or even a month that has five weeks rather than four.
Why does “churn” exist?
While states typically review eligibility for Medicaid and CHIP only once each year, enrollees are required to report changes in circumstances that impact eligibility even if such changes are temporary. States also often conduct periodic data reviews to seek out such changes. If people do not respond to state inquiries regarding these data checks or they are unable to submit the right paperwork or information on time, their coverage is dropped, even if they still meet the eligibility criteria. [i][ii]
Families often do not know when their program certification periods expire, may be dropped without knowing it, or may not know why they lost coverage. Those who have been disenrolled typically say they wanted to retain their insurance coverage, but did not know how to do so. [iii]
Who is impacted by churn?
Eligibility churn impacts over a million people on Medicaid and CHIP every year. [iv] Of these, churn affects non-elderly adults more than seniors, children, or people with disabilities. Furthermore, churn negatively impacts people of color and those with less education more than other groups. Results of a 2014-2015 survey show that 38 percent of Black households and 45 percent of Hispanic households face income fluctuations compared to 32 percent of White households. 40 percent of households with a high school degree or less education experienced fluctuations in income, compared to only 28 percent of households possessing a college degree. These rapid but often short-lived changes in income can result in periods of ineligibility for Medicaid, requiring people to undergo a full application process to reestablish eligibility. [ii]
Living in a Medicaid expansion state versus a non-expansion state also makes a difference. Medicaid enrollees aged 19 to 64 in states that expanded Medicaid were 4.3 percentage points less likely to experience coverage disruptions compared to similar individuals in states that have yet to expand. This translates to continuous coverage for roughly 500,000 enrollees every year. And while almost half of pregnant individuals in non-expansion states experienced coverage gaps from preconception to birth, only one-third of similar individuals in Medicaid expansion states did. Medicaid expansions were also associated with fewer coverage disruptions for people of color versus White individuals. [ii]
For what proportion of a year are Medicaid enrollees typically enrolled in the program?
Data from 2012 show that the typical individual on Medicaid is covered for less than 10 months of the year. Coverage periods are lowest for non-elderly, non-disabled adults (about 8.6 months), but somewhat higher for those with disabilities (10.8 months), seniors (10.3 months), and children (10 months). [v] These data may overstate the length of time that individuals have ongoing coverage, since it does not account for short breaks in coverage.
What is the impact of “churn” on enrollees?
People experiencing gaps in Medicaid coverage often experience serious health problems. [vi]
People with interruptions in coverage often delay or forgo care, or leave prescriptions unfilled because they cannot afford them. Many who lack insurance even face serious financial consequences because they must pay – or go into debt – for medical care needed while they were uninsured. These people may be pursued by debt collection firms, deplete their savings, or be forced to borrow money to pay their medical expenses. [vii]
A 2018 University of Michigan study found that privately insured diabetes patients with coverage gaps of 30 to 60 days were five times more likely to end up in an ER, hospital or urgent care once they regained coverage. [viii]
What is continuous eligibility?
Under 12-month continuous eligibility, an individual is guaranteed 12 months of coverage in Medicaid or CHIP.
Eligibility is re-evaluated only at the end of the 12-month period, at which time income and other eligibility factors are assessed and may result in a change. But not before.
Don’t states use 12-month continuous eligibility now?
Some do, for certain groups of enrollees. But most do not.
States are allowed to employ 12-month continuous eligibility for children in Medicaid and CHIP. However, fewer than half currently do so. [ix] And because 12-month continuous eligibility is optional, states can change eligibility rules at any time.
States cannot use 12-month continuous eligibility for adults without undergoing a lengthy waiver review process: as a result, only two states – New York and Montana – have received approval to do so. [x]
How can 12-month continuous eligibility in Medicaid improve care?
A November 2012 report from the Government Accountability Office found that Medicaid enrollees “reported low rates of difficulty obtaining necessary medical care and prescription medicine, similar to those with private insurance for a full year.” By comparison, individuals “with partial year health insurance-coverage for between 1 and 11 months-were more likely to report difficulties obtaining needed care, whether covered by Medicaid or private health insurance. In calendar years 2008 and 2009, the percentage of Medicaid beneficiaries enrolled for a partial year who reported difficulties obtaining needed medical care was almost double that of full-year Medicaid beneficiaries.” [xi]
Further, a study by researchers at the George Washington University indicates that 12-month continuous eligibility policies for children in Medicaid lead to increased access in specialty health care, increased preventive care visits, and a reduction in health care coverage gaps. The study focuses on the three most recent years of data from the National Survey of Children’s Health for children under 18 years of age, whose family household income falls below 138 percent of the federal poverty line. [xii]
Didn’t changes to Medicaid and CHIP in the Affordable Care Act address this issue?
No, they do not.
Obama-era Medicaid and CHIP regulations require states to establish 12-month renewal periods. [xiii] However, an individual can lose eligibility during that 12-month period. 12-month renewal periods currently used by states have not diminished eligibility churn.
In contrast, under 12-month continuous eligibility, a person continues to be eligible for Medicaid or CHIP over the full 12-month period, at which time eligibility is reviewed.
Administrative Burden and Impact on Quality of Care
What is the administrative burden of churn on states?
When people churn through Medicaid and CHIP, administrative costs associated with enrollment processing and reprocessing increase. This administrative burden is borne by state and local eligibility agencies, health plans, and providers, all of whom may spend time helping enrollees re-enroll.
For example, in New York, the administrative costs of enrolling a child in Medicaid or that state’s CHIP program were about $280. [xiv] A study found that about 600,000 children in California lost Medicaid coverage over three years due to churn, but were re-enrolled when policies changed. The reprocessing of their enrollment cost $120 million. [xv] When Washington State shifted children’s certification periods from 12 to six months, administrative costs rose by $5 million.[xvi]
What is the administrative burden of churn on providers and health plans?
Providers and plans have additional paperwork burdens for enrollees who churn, including submitting and resubmitting claims and resending “new enrollee” packets as individuals cycle on and off the programs. Changes or loss of coverage may also disrupt care and disease management and relationships with providers and social support systems. Missed visits and lapses in treatment are disruptive to patient care, but they also are disruptive to provider scheduling and office management.
How does churn impact measuring quality of care?
In addition to the studies which show that individuals with breaks in health insurance coverage often experience disruptions in health care, churn also interferes with efforts to measure health care quality. Most measures of quality require that all individuals included in the measures be enrolled continuously during a 12-month period with only a limited break in service. Since churn prevents significant numbers of enrollees from retaining continuous coverage for a 12-month period, it is difficult to measure quality because many enrollees are excluded from the data set.
In 2018, Congress passed requirements for all states to report all pediatric core measures and all adult core behavioral health measures. Without an attendant requirement for 12-month continuous eligibility in Medicaid and CHIP, state efforts to report the quality measures are impeded.
How does continuous eligibility reduce unnecessary medical costs and decrease administrative burdens?
Continuous Medicaid eligibility is more efficient than eligibility churn, both medically and administratively. Several recent analyses show that longer Medicaid coverage lowers average monthly medical costs. The average monthly medical expenditure for an adult enrolled in Medicaid for 12 months is about two-thirds the level of a person enrolled for just six months and half the level of a person enrolled for just one month. [xvii]
Skipped or delayed health care can lead to unnecessary illness or death, and can result in inefficient and expensive use of emergency room or hospital care for preventable conditions like asthma or diabetes. [xviii] Gaps in Medicaid coverage have been associated with increased hospitalization for heart failure, diabetes, and chronic obstructive pulmonary disease.
A study of the Florida Medicaid program showed that patients with depression showed an increase in hospital admissions and emergency department use after experiencing a lapse in Medicaid coverage. [xix]
Providing continuous eligibility would reduce the administrative expenses related to disenrollment and re-enrollment when a person loses and regains eligibility in Medicaid or CHIP during a 12-month period.
[i] Wagner, J and Solomon, J. (May 2021). Continuous Eligibility Keeps People Insured and Reduces Costs. Center on Budget and Policy Priorities.
[iii] Perry, M. (Feb 2009). Perry, M. (Feb 2009). Reducing Enrollee Churning in Medicaid, Child Health Plus and Family Health Plus: Findings from eight Focus Groups with Recently Disenrolled Individuals. New York State Foundation.
[iv] Ruff, E and Fishman, E. (Apr 2019). The Return of Churn: State Paperwork Barriers Caused More Than 1.5 Million Low-Income People to Lose Their Medicaid Coverage in 2018. Families USA.
[v] Leighton Ku, PhD, MPH, Erika Steinmetz, MBA, and Tyler Bysshe, MPH (Nov 2015). Continuity of Medicaid Coverage in an Era of Transition. George Washington University.
[vi] Leighton Ku, PhD, MPH, and Erika Steinmetz, MBA. (Sept 2013). Bridging the Gap: Continuity and Quality of Coverage in Medicaid. George Washington University.
[vii] Duchon, L., Schoen, C., Doty, M., et al. (Dec 2001). Security Matters: How Instability in Health Insurance puts U.S. Workers at Risk. The Commonwealth Fund.
[viii] Rogers, M., Lee, J., Tipineni, R., et al. (July 2018). Interruptions in Private Health Insurance and Outcomes in Adults with Type 1 Diabetes: A Longitudinal Study. Health Affairs.
[ix] Brooks, T., Wagnerman, K., et al. (Jan 2017). Medicaid and CHIP Eligibility, Enrollment, Renewal, and Cost Sharing Policies as of January 2017: Findings from a 50-State Survey . Kaiser Family Foundation. Table 14: Express Lane Eligibility and 12-Month Continuous Eligibility for Children, January 2017.
[x] Kowlesser, et al. (July 2019). Federal Evaluation of Montana Health and Economic Livelihood Partnership (HELP): Draft Interim Evaluation Report. Social and Scientific Systems and The Urban Institute.
[xi] GAO 13-55 MEDICAID: States Made Multiple Program Changes, and Beneficiaries Generally Reported Access Comparable to Private Insurance. November 2012. Government Accountability Office.
[xii] Ku, Leighton and Brantley, Erin. (June 2020). Continuous Medicaid Eligibility for Children and Their Health. George Washington University Milken Institute School of Public Health.
[xiii] Medicaid Program; Eligibility Changes under the Affordable Care Act of 2010. Title 42 Code of Federal Regulation Pt. 435.916. 2012.
[xvi] Summer L., & Mann, C. (Jun 2006). Instability of Public Health Insurance Coverage for Children and Their Families: Causes, Consequences, and Remedies. Washington, DC: The Commonwealth Fund.
[xviii] Bindman, A., Chattopadhyay, A., & Auerback, G. (Dec 2005). Interruptions in Medicaid Coverage and Risk for Hospitalization for Ambulatory Care-Sensitive Conditions, Annals of Internal Medicine, 149(12):854-60.
[xix] Harman, J.S., Hall, A.G., & Zang, J. (Jan 2007). Changes in Health Care Use and Costs After a Break in Medicaid Coverage Among Persons with Depression. Psychiatric Services 58(1). 49-54.