The Ongoing Importance of Enrollment: Churn in Covered California and Medi-Cal
By Miranda Dietz, Dave Graham-Squire, and Ken Jacobs
UC Berkeley Labor Center, April 2014
Projections for enrollment in the new insurance options created under the Affordable Care Act (ACA) are often point-in-time estimates. But just as people frequently move in and out of being uninsured, insurance coverage through Covered California (California’s health insurance marketplace) or through Medi-Cal is dynamic and can change for an individual over the course of a year.
Following each cohort across 12 months and observing changes in income, take up of employer sponsored insurance (ESI), and loss of insurance recorded in the SIPP, the analysis predicts the share of those originally enrolled who will remain in the same type of coverage at the end of the 12 months.
For individuals enrolled in Medi-Cal:
74.5% Stay in Medi-Cal
16.5% Income increases, eligible for Covered California
9.1% Leave for job-based coverage
0.0% Become uninsured (zero “unlikely to hold in reality”)
For individuals enrolled in Covered California (range between stronger and weaker retention scenarios):
57.5%-53.3% Stay in Covered California
21.3%-20.5% Take up Medi-Cal/public coverage
19.0%-18.3% Leave for job-based coverage
2.2%-7.9% Become uninsured
Enrollment in Medi-Cal and Covered California will be dynamic as Californians move in and out of coverage and change coverage sources. This policy brief predicts a significant level of churn out of Medi-Cal and Covered California each year. Approximately one-fifth of the cohort of Covered California enrollees are expected to transition to public coverage such as Medi-Cal, and another fifth are expected to transition to employer-sponsored coverage.
Understanding the extent and nature of churn can help in planning for ongoing enrollment, ensuring smooth health coverage transitions and continuity of care, and reducing uninsurance.
* Effective implementation of the changes aimed at streamlining the redetermination processes is required for the stability of the Medi-Cal population to actually increase.
* It will be vital for the enrollment infrastructure — from outreach, to the website, to in-person and call-center assistance — to be available and active even outside of open enrollment periods.
* Making sure that people successfully transition from one type of insurance to another will depend not only on the ease of enrollment, but also the extent to which Covered California and Medi-Cal take advantage of existing institutional points of connection to people undergoing these life transitions, e.g., COBRA notices or government services like unemployment, CalFresh (food stamps), or the Department of Motor Vehicles.
* It will be important that outreach, enrollment assistance, and effective sign up processes are available throughout the year for Medi-Cal and for those who experience life transitions that qualify them for mid- year enrollment in Covered California.
Bouts of uninsurance are known to have negative health consequences. The uninsured have higher mortality overall, and are more likely to go without care. Those who are not continuously insured underutilize preventive care, and have been found to use more care when they do become insured.
http://laborcenter.berkeley.edu/healthcare/churn_enrollment.pdf
Comment:
By Don McCanne, M.D.
One of the fundamental policy flaws with a fragmented, multi-payer system of financing health care is that the eligibility of each individual for various sources of coverage is dynamic – ever changing – requiring movement in and out of various forms of coverage or ending up with no coverage at all. This study from the UC Berkeley Labor Center shows that just the movement out of California’s Medicaid (Medi-Cal) and exchange plans (Covered California) is projected to be considerable during a twelve month period.
About one-fourth of Medi-Cal enrollees will leave the program because of income increases exceeding eligibility levels for the program, or because of becoming qualified for job-based coverage. For the Covered California exchange, almost half will leave because of a decline in income to levels eligible for Medi-Cal, or because of a transfer into job-based coverage, or simply because of falling into the ranks of the uninsured.
When you look at their recommendations to ameliorate the instability of coverage, it demonstrates once again that ACA is increasing the administrative complexity of our system when what we need is the administrative simplicity of a single payer system.
This study does not address the many other circumstances that can result in a change or loss of coverage, especially with employer-sponsored plans. Unstable coverage – churning – can have negative consequences because of disruption of continuity of care such as through your source of primary care, especially if you have or will have a chronic disorder requiring ongoing medical management.
The following paragraph is from a 2008 Quote of the Day (before ACA) that describes a few but by no means all of the reasons for churning. Churning is not a new discovery. Unfortunately, the ACA improvements have only a minimal impact in reducing churning. With the new mandates, eligibility requirements and other ACA provisions, churning may actually show a net increase. Reading this paragraph will once again remind you why we need single payer reform – an improved Medicare that covers absolutely everyone, forever. With single payer, churning is eliminated.
“You may have changed jobs, likely more than once, and lost the coverage that your prior employer provided. Your employer may have changed plans because of ever-increasing insurance premiums. Frequently your insurer introduces plan innovations such as larger deductibles, a change from fixed-dollar copayments to higher coinsurance percentages, tiering of your cost sharing for services and products, reduction in the benefits covered, dollar caps on payouts, and other innovations all designed to keep premiums competitive in a market of rapidly rising health care costs. You may have lost coverage when your age disqualified you from participating in your parents’ plan. You may have found that health benefit programs have been declining as an incentive offered by new employers. Your children may have lost coverage under the Children’s Health Insurance Program when your income, though modest, disqualified your family from the program. Your union may not have been able to negotiate the continuation of the high-quality coverage that you previously held. Your employer may have reduced or eliminated the retirement coverage that you were promised but not guaranteed. Your employer may have filed for bankruptcy without setting aside the legacy costs of their pensions and retiree health benefit programs. You may have decided to start your own small business and found that you could not qualify for coverage because of your medical history, even if relatively benign, or maybe your small business margins are so narrow that you can’t afford the premiums. You may have been covered previously by a small business owner whose entire group plan was cancelled at renewal because one employee developed diabetes, or another became HIV infected. Your COBRA coverage may have lapsed and you found that the individual insurance market offered you no realistic options. You may have retired before Medicare eligibility, only to find that premiums were truly unaffordable or coverage was not even available because of preexisting medical problems.”
https://www.pnhp.org/news/2008/july/keeping-the-insurance-you-have-dont-believe-it