In health insurance, “churn” refers to people moving between various forms of coverage as their life and economic circumstances change. Those in employer-sponsored plans who are dismissed or leave their jobs move into the individual market, COBRA, Medicaid or go uninsured. Those on Medicaid can earn off eligibility if their household income rises above their state’s cut off point. People move back to employer-sponsored coverage when they or their partners are employed by an entity that offers health coverage either on its own or as required starting next year in the case of large employers.
As well as these forms of coverage, the Patient Protection and Affordable Care Act adds a new category this year: those eligible for advance tax credit-subsidized coverage in the state health benefit exchange marketplace. Like Medicaid, eligibility for this form of coverage is means tested and can change as household income rises above 400 percent or falls below 138 percent of federal poverty.
An analysis of the nation’s largest state health benefit exchange marketplace, Covered California, finds churn over a 12 month period could amount to nearly half of those enrolled in subsidized qualified health plans (QHPs) and a quarter of those enrolled in Med-Cal, California’s Medicaid program. Click here for the report by the UC Berkeley Center for Labor Research and Education.
The churn among QHPs has implications for the exchange marketplace insofar as exchanges are financially reliant on health plan issuer participation fees assessed on QHP premiums starting in 2015 when federal establishment grant funding will no longer be available. In that vein, the report concludes Covered California (and by implication other state-based exchanges) must devote ongoing attention to enrollment throughout the year outside of open enrollment periods including outreach, web portal, in-person and call-center assistance.
Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email