While upwards of 96 million Americans, an estimated 29 million are likely to churn. Churning is a phenomenon referring to the low retention rates that characterize public insurance resulting from the high drop out rates and temporary coverage gaps. Under Title 42 of the Code of Federal Regulations 435.916, the state agencies are mandated to redetermine (and facilitate the same) Medicaid/CHIP eligibility, at least once in twelve months. Children whose parents change health insurance coverage are unlikely to maintain the source of care. Even most importantly, the yearly eligibility redetermination often leads to some children losing insurance because of miscommunication with their families, failure to complete the required forms, and administrative problems. Without continuing coverage, these problems would lead to transient coverage losses. With the Affordable Care Act (2010), there is bound to a churn between marketplace exchanges and Medicaid for vulnerable populations whose incomes fall below and above 133% of the Federal Poverty Line (FPL).
Medicaid (and CHIP) is geared at, and should meet the health coverage needs of low-income adults, children, and families, without regard to the categorical eligibility. According to the American College of Physicians (2011), the minimum eligibility standards need to be uniform across the country (a condition that is negated by the optional provision for states to establish continuing coverage) and federally mandated Medicaid expansion should be funded by Washington. Other than the administrative difficulties that cause transient losses of CHIP/Medicaid coverage for children, Affordable Care Act sets Medicaid eligibility at 133% of FPL (and CHIP at 185% FPL). Adults (and children from families) whose income is above 133% FPL and 185% FPL respectively, who cannot afford private insurance. By federal law, states are expected to conduct eligibility reviews at least yearly and failitate the re-evaluation by availing the forms and instituting procedures, to allow families to report changes in their relevant circumstances (Guerra & McMahon, 2014; Mehta & Mehta, 2012).
Continuous eligibility for children for instance, means that they are to stay for an additional year (or shorter) during which time the family will be requested to report any changes in their circumstances, as against cutting them off as soon as they fail to meet the criteria (or fail to submit the forms). It is, therefore, possible to ensure that frequent losses in coverage due to the disruptive switches from Medicaid to private insurance. With close to 30 million people being vulnerable to churning, it is important that states profile such populations (e.g., by age, household size, marital status, employment status, income, program enrolment status, and income).
Amending a legislation is can be difficult, and involves numerous parties that are involved in making the actual amendments, and those that are affected by the proposed amendments. The most important stakeholders include:
Voters/public – their opinions influence politicians in both at a local level and in Washington (e.g. through opinion polls, presidential and other elections)
Senate/Congress, the executive and state governments – Congress/Senate and the president are directly involved in changing the legislation, and their support is, therefore, indispensable. This is even more important given the Republican-Democratic party polarization occasioned by the Affordable Care
The media – its coverage of the issue and creation of public awareness important
Lobby groups – Powerful healthcare think tanks such as the Heritage Foundation, and Kaiser Family Foundation have an important role in shaping opinions of key decision-makers
The state has the option of maintaining CHIP and Medicaid coverage for adults (and persons under the age of 19 years) for up twelve months, even after the family’s MAGI-determined income falls outside the eligibility range (133% of the FPL) and/or pending eligibility reviews. However, only 30 states had exercise the option, with just 18 states having created a coordinated policy in offering twelve-month continuous Medicaid/CHIP eligibility. The public policy question is whether section 4731 of the Balanced Budget Act of 1997 should be amended to render it mandatory for states to provide twelve-month continuing eligibility to avoid vulnerable children whose parents are just ineligible for Medicaid but cannot afford private insurance.
The proposed amendment to the Balanced Budget Act of 1997 will seek to achieve the following primary objective:
There are other alternatives to avoid transient lapses in health insurance for vulnerable populations (or not). The first option is to let the status quo continue, which leaves about 30 million people at risk of being without health insurance, but it is still the easiest alternative (Guerra & McMahon, 2014; Sarna et al., 2013). Secondly, the Affordable Care Act (2010) can be amended to include an eligibility overlap, in which vulnerable families may have either Medicaid or private insurance. For instance, by increasing the eligibility criteria to between 133% FPL to 155% FPL, whereby individuals in this band will still qualify for Medicaid unless they have enrolled for private insurance. However, the political feasibility of this alternative is shaky, given the worries over the unsustainability of Medicaid and the active Republican opposition to the Affordable Care Act (2010). Lastly, amending Balanced Budget Act of 1997 is more feasible because majority of states already have implemented continuing coverage for the vulnerable populations, and thus this policy change can be sold as a normalization action.
The ultimate goal of the proposed policy change is to ensure a reduction in the number of people that transiently lose coverage due to disruptions in moving between Medicaid and private insurance. To evaluate the policy’s success, the number of children that would have otherwise lost coverage within the twelve months, as determined from the redetermination evaluation would be important.
Churning hurts the very purpose of public health insurance because it allows even administrative problems (e.g. failed submission of forms or errors in making out forms) to lock out eligible children from Medicaid (Folland, et al., 2013; Mason, et al., 2013). Even most importantly, the Balanced Budget Act of 1997 leaves it at the option of every state to provide continuing coverage to children that lose Medicaid/CHIC coverage, but only 30 states have exercised this option. Effectively, the Act is inherent inequitable at a national level. By amending Balanced Budget Act of 1997 to make it mandatory for all states to provide continuing coverage to children who lose Medicaid/CHIC coverage, the churning rate among this population will be reduced considerably.
American College of Physicians. (2011). Medicaid and Health Care Reform: Policy Paper. Independence Mall West, Philadelphia: American College of Physicians.
Center for Responsive Politics. (2014). Lobbying Database. Retrieved July 4, 2015, from http://www.opensecrets.org/lobby/index.php
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Folland, S., Goodman, A., & Stano, M. (2013). Economics of Health and Health Care. Upper Saddle River, New Jersey: Pearson Education, Inc.
Guerra, V., & McMahon, S. (2014). Minimizing Care Gaps for Individuals Churning between the Marketplace and Medicaid: Key State Consideration. Washington, DC: Center for Strategic Care Strategies, Inc.
Mason, D. J., Leavitt, J. K., & Chaffee, M. W. (2013). Policy and Politics in Nursing and Healthcare - Revised Reprint. New York: Elsevier Health Sciences.
Mehta, J., & Mehta, J. (2012). How the Patient Protection and Affordable Care Act (PPACA) SupportsFederalism. J Forensic Res 3, e107.
Sarna, L., Bialous, S. A., Chan, S. S., Hollen, P., & O’Connell, K. A. (2013). Making a difference: Nursing scholarship and leadership in tobacco control. Nursing Outlook, 61(1), 31-42.