Margaret A. Murray, CEO
Association for Community Affiliated Plans
for the Senate Finance Health Subcommittee Hearing on
“Medicaid: Compliance with Eligibility Requirements”
October 30, 2019
Medicaid is the backbone of health coverage and care for 74 million Americans with low incomes, many of whom have significant health care needs.
Despite being frequently described as “second-class care” by critics, Medicaid provides essential coverage to pregnant women and children, working adults whose employers do not offer them affordable employer-based coverage, the blind, people with disabilities, and seniors. More than 69 percent of this coverage is provided through Medicaid managed care plans and of that, roughly one-third is provided by Safety Net Health Plans (SNHPs).
ACAP is proud to represent 70 SNHPs serving more than 20 million individuals in 29 states, including most of the states represented on this Subcommittee today.
America’s SNHPs have led the fight to address instability and uncertainty in Medicaid coverage. Unlike Medicare, employer-sponsored, or Marketplace-based coverage, Medicaid enrollees often lose eligibility for benefits through no fault of their own. This phenomenon, known as “churn,” is a product of bureaucratic paperwork burdens or from slight, temporary changes in income (such as working overtime or additional hours during peak seasons) which push individuals slightly above the income thresholds for eligibility.
Studies suggest that churn impacts as many as 14 million Americans each year.
Medicaid churn creates unnecessary costs, duplicative and wasteful bureaucracy in the program, weakens the efforts of health plans to coordinate care and improve quality, undermines efforts to treat opioid and other substance use disorders (SUD) among the Medicaid population, and creates disincentives to work.
Congress has the ability to address this serious problem. ACAP calls on the Senate and the Finance Committee to establish 12-months of continuous Medicaid eligibility to ensure that Medicaid is coverage that Americans can count on.
Churn Adds Unnecessary Costs and Bureaucracy to Medicaid
Research shows us that continuous Medicaid coverage reduces the month-over-month medical costs for beneficiaries, providers, states, and the federal government. These savings are produced because illnesses and chronic conditions are addressed over time and the costs associated with such conditions decline as enrollees receive additional treatment. However, with the loss of coverage, an enrollee often re-enters the Medicaid program having lost the benefits of care coordination and continuity of care. This eradicates the savings associated with treatment and plans, providers, and patients need to address these health care issues again. Churn produces an inefficient vicious cycle that undermines the effectiveness of continuous treatment while adding unnecessary duplication of administrative costs for states and health plans.
Churn Weakens Care Coordination and Quality Improvement Efforts in Medicaid
Medicaid managed care plans rely on continuity of coverage to ensure that chronic conditions, substance use disorder treatment, and other health-related issues are monitored to ensure compliance. Whether through regular visits with clinicians or regular use of prescription medications, health plans rely on a data feedback loop to ensure that enrollees are getting the care they need. The effectiveness of this feedback loop can only be maximized through continuous coverage.
Unfortunately, churn disrupts this continuity and severs the data feedback needed to ensure compliance and improve health outcomes. In addition, because quality improvement requires long-term data on the patient’s compliance to determine the effectiveness of treatment, interruption in coverage renders quality improvement efforts moot. That is why the National Committee on Quality Assurance (NCQA) has endorsed the Stabilize Medicaid and CHIP Coverage Act to ensure that quality improvement efforts in Medicaid and CHIP are built on a solid, stable foundation.
Providing 12-month continuous eligibility in Medicaid and CHIP will not only ensure the effectiveness of care management and care coordination, it is also a necessary element of any effort to improve quality of care. Congress should act to ensure that Medicaid dollars are not being wasted because churn interferes with these efforts.
Churn Undermines Efforts to Treat Opioid and other Substance Use Disorders
America is in the grips of an opioid overuse crisis and Medicaid is on the front lines of successful efforts to address it. According to CMS, nearly 12 percent of Medicaid enrollees over 18 have a SUD; coverage has been effectively extended to these adults in states that took advantage of the Affordable Care Act’s Medicaid expansion to adults up to 138 percent of the federal poverty level.
Because treatment of SUD – whether it is in the form in rehabilitation services, medication assisted therapies, or counseling – requires continuity of coverage, anything that disrupts treatment (including the loss of coverage through churn) undermines other efforts by local, state, and federal policy makers to address America’s opioid and substance abuse epidemic. The effectiveness of last year’s bipartisan SUPPORT Act will be muted because churn in the Medicaid program will undermine other efforts to impact the opioid overuse crisis.
To maximize the effectiveness of additional dollars in treatment of SUD, Congress must plug the “leaky sieve” of Medicaid coverage created by churn to ensure that people suffering from opioid and other substance use disorders are provided with effective and continuous coverage.
Churn Creates Disincentives to Work
One major cause for churn occurs when working Americans (who are not offered or cannot afford employer-sponsored coverage) see a temporary boost in income which slightly exceeds a state’s income eligibility limits for coverage. Traditionally, these temporary increases in income come from the choice of an employee to take overtime hours or to add hours for part-time, seasonal work. If the employee chooses to work more, the state assumes that their permanent income has increased and deems them ineligible for Medicaid, despite the fact that their income often returns to its previous level shortly thereafter.
In these instances, churn creates an obvious disincentive for Medicaid-covered employees to seek additional work. Both Republicans and Democrats agree that the Medicaid program should not create such incentives, and that establishing stable coverage in Medicaid will allow for other tangible benefits as well among the working population, notably by maintaining a healthy and effective workforce.
The Stabilize Medicaid and CHIP Coverage Act is the Solution to Churn
Bipartisan legislation to address churn in Medicaid and CHIP by providing for 12-months of continuous eligibility for enrollees has been introduced in the Senate and the House. This legislation, the Stabilize Medicaid and CHIP Coverage Act (S.873/H.R.1879), has been sponsored by Senator Brown (D-OH), Baldwin (D-WI), Warren (D-MA), Whitehouse (D-RI) in the Senate, and Representatives Katko (R-NY), Kennedy (D-MA), Dingell (D-MI), Fitzpatrick (R-PA), Stefanik (R-NY) in the House.
By enacting 12-month continuous eligibility, Congress would begin to align Medicaid coverage with more stable employer-sponsored and Medicare coverage. This common-sense legislation is supported by a wide range of organizations representing health plans, hospitals, clinicians, quality organizations, and patient advocates (see attached list).
ACAP uses this opportunity to call upon Congress to provide 12-month continuous eligibility for Medicaid and CHIP and to turn these programs into stable coverage that Americans can count on.
For additional information on the Stabilize Medicaid and CHIP Coverage Act or about churn in the Medicaid program, visit www.communityplans.net/coverage-you-can-count-on/stabilize-coverage-in-medicaid-and-chip or contact Jennifer Babcock, ACAP’s Vice President of Medicaid Policy and Director of Strategic Operations at email@example.com.
Organizations Supporting the Stabilize Medicaid and CHIP Coverage Act
America’s Essential Hospitals
Association for Community Affiliated Plans
Catholic Health Association
Children’s Hospital Association
National Committee for Quality Assurance
National Health Care for the Homeless Council
National MLTSS Plan Association
Partnership for Medicaid
The Jewish Federations of North America
American Academy of Physicians
American Academy of Pediatrics
American College of Obstetricians and Gynecologists
Association of Clinicians for the Underserved
The Jewish Federations of North America
National Association of Community Health Centers
National Association of Counties
National Association of Pediatric Nurse Practitioners
National Association of Rural Health Clinics
National Council for Behavioral Health