Churning

What is “churning”?
“Churning” is an on-and-off-and-on pattern of enrollment that may be 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 “churning” exist?
Many enrollees must prove that they are eligible for Medicaid several times in a year. If they are unable to submit the right paperwork or information on time, their coverage is dropped, even if they still meet the eligibility criteria. 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. [i]

How many people are impacted by churning?
Medicaid and CHIP combined provide health insurance coverage to almost 72.5 million people over the course of 2018. But the number of individuals enrolled in a typical month was just 58.8 million – about 20 percent lower. [ii] Although this difference cannot be entirely attributed to eligibility churn, these numbers suggest a difference of almost 14 million between the number of people who are ever covered in a given year and the number covered at any point in the year.

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). [iii] This 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 “churning” on enrollees?
People experiencing gaps in Medicaid coverage often experience serious health problems.[iv]

People with interruptions in coverage often have to delay or forgo care, or leave prescriptions unfilled because they cannot afford them. Many who briefly lack insurance face serious financial consequences because they must pay – or go into debt – for medical care needed while they were uninsured. They are pursued by debt collection firms, deplete their savings, or are forced to borrow money to pay their medical expenses. [v]

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. [vi]

Continuous Eligibility

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, less than half do so in Medicaid, and slightly more do so in CHIP. [vii] 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 going through a lengthy waiver review process: as a result, only one state (New York) has received approval to do so.

How can 12-month continuous eligibility in Medicaid improve care?
A November 2012 report from the Government Accountability Office found that beneficiaries “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.” [viii]

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.[viiii] However, an individual can lose his or her eligibility during that 12-month period. In fact, most states use 12-month renewal periods today, and there continues to be a substantial amount of churning in the programs.

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 churning 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.[x] A study found that about 600,000 children in California lost Medicaid coverage over three years due to churning, but were re-enrolled when policies changed. The reprocessing of their enrollment cost $120 million.[xi] When Washington State shifted children’s certification periods from 12 to six months, administrative costs rose by $5 million.[xii]

What is the administrative burden of churning 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 churning 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, churning 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 churning 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 a requirement 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, state efforts to report the quality measures will be impeded.

How does continuous eligibility reduce unnecessary medical costs and increase administrative burdens?
Continuous Medicaid eligibility is more efficient, 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.[xiii]

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.[xiiii] Gaps in Medicaid coverage have been associated with increased hospitalization for heart failure, diabetes, and chronic obstructive pulmonary disease.[v]

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. [vi]

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.

 

REFERENCES

[i] 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.

[ii] The 75 million includes 66.0 million individuals on Medicaid and 7.9 million children on CHIP. Medicaid and CHIP Access and Payment Commission. “Report to Congress on Medicaid and CHIP. June 2013, Table 19.

[iii] Leighton Ku, PhD, MPH, Erika Steinmetz, MBA, and Tyler Bysshe, MPH, George Washington University. Continuity of Medicaid Coverage in an Era of Transition . November 2015.

[iv] Leighton Ku, PhD, MPH, and Erika Steinmetz, MBA, George Washington University.  Bridging the Gap: Continuity and Quality of Coverage in Medicaid. September 2013.

[v] 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.

[vi] 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.

[vii] Kaiser Family Foundation. “Express Lane Eligibility and 12-Month Continuous Eligibility for Children.” January 2017.

[viii] GAO 13-55, “MEDICAID: States Made Multiple Program Changes, and Beneficiaries Generally Reported Access Comparable to Private Insurance.”

[viiii] Medicaid Program; Eligibility Changes under the Affordable Care Act of 2010. Title 42 Code of Federal Regulation Pt. 435.916. 2012.

[x] Fairbrother, G., Dutton, M., et al. (2004). Costs of Enrolling Children in Medicaid and SCHIP. Health Affairs (Millwood) 23(1): 237-43.

[xi] Fairbrother, G. (Apr 2005). How Much Does Churning in Medi-Cal Cost? Woodland Hills, California: The California Endowment.

[xii] 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.

[xiii] Ku, L., Steinmetz E, Bysshe T. Continuity of Medicaid Coverage in an Era of Transition.

[xiiii] National Research Council. (2002) Care Without Coverage: Too Little, Too Late. Washington, DC: The National Academies Press.

[xv] 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.

[xvi] Harman, J.S., Hall, A.G., & Zang, J. (2008). Changes in Health Care Use and Costs After a Break in Medicaid Coverage Among Persons with Depression. Psychiatric Services 58(1). 49-54.