Fwd: qotd: Half will have change of eligibility for Medicaid or subsidies within one year

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-------- Original Message --------
Subject: qotd: Half will have change of eligibility for Medicaid or
subsidies within one year
Date: Fri, 14 Mar 2014 12:39:57 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Health Affairs
April 2014 (online March 12, 2014)
Medicaid And Marketplace Eligibility Changes Will Occur Often In All
States; Policy Options Can Ease Impact
By Benjamin D. Sommers, John A. Graves, Katherine Swartz and Sara Rosenbaum

Beginning January 1, 2014, the Affordable Care Act (ACA) established two
pathways to health insurance for nonelderly US citizens and legal
residents. The first was an expansion of Medicaid coverage for people
with annual incomes of up to 138 percent of the federal poverty level in
states that elected to expand their programs. The second pathway was
subsidizing private coverage purchased via health insurance Marketplaces
for people with incomes of 138–400 percent of poverty who do not have an
offer of affordable coverage through an employer. The pathways are
designed to work in tandem, but a major challenge is how to promote
continuity of coverage and health care for people when their incomes and
life circumstances cause them to transition between Medicaid and
subsidized private coverage.

In states that opt out of the ACA's Medicaid expansion, changes in
income or family circumstance will lead many people to lose coverage
entirely unless they qualify for coverage under one of the traditional
categories of Medicaid eligibility: pregnancy, disability, or being the
impoverished parent of a minor child. A less stark problem that presents
a different set of challenges will occur in states that do expand
Medicaid: the potential for moving between Medicaid and Marketplace
coverage.

Both of these types of "churning"—loss of coverage and frequent
transitions in the source of coverage—can cause difficulties. The total
loss of coverage raises the most serious problems in terms of access to
care, but frequent transitions across coverage pathways also raise
important issues for beneficiaries, health plans, providers, and policy
makers. From one year to the next or during any given year, many
individuals and families will experience changes in eligibility either
for Medicaid or for Marketplace coverage. These eligibility changes
could lead to both gaps in coverage and disruptions in the continuity of
care, because people might have to find new providers or change their
existing health treatments if their new insurance plan uses a different
provider network or covers different services than their old plan did.

Previous research has estimated that approximately half of low-income
adults might experience a change in income or family circumstances
leading them to transition from Medicaid to Marketplace coverage (or
vice versa) each year.

From the Discussion

We estimated that approximately half (plus or minus 5 percentage points)
of adults likely to be eligible for Medicaid or subsidized Marketplace
coverage will experience an eligibility change within twelve months.

It is important to recognize that the eligibility changes we have
analyzed are the result of an effort to expand pathways to affordable
coverage for all Americans. Churning has often been used to describe the
negative outcome of moving into and out of insurance coverage and
becoming uninsured. In contrast, we are discussing changes that are a
by-product of a system that allows for transitions among insurance
pathways. These transitions increase the risks of disrupting care
continuity and of having short gaps in coverage. But they represent a
different (and less problematic) form of churning than that between
having Medicaid or Marketplace coverage and being uninsured.

However, when low-income adults in states that opt not to expand their
Medicaid programs experience a loss of income that drops them below 100
percent of poverty, most will not be eligible for subsidized coverage in
the Marketplace or for Medicaid. Most nonexpansion states restrict
Medicaid eligibility for adults to pregnant women, certain low-income
adults with disabilities, and parents of minor children with incomes of
no more than 35 percent of poverty on average. In other words, most
adults who lose Marketplace subsidies in nonexpanding states will become
uninsured, as has traditionally happened to adults who lose Medicaid
eligibility.

Policy Implications

A number of policies have recently been proposed to mitigate the effects
of churning between Medicaid and Marketplace coverage, and state policy
makers should consider them in the light of our findings.

One option is for states to adopt twelve-month continuous eligibility
periods in Medicaid as a means of overcoming the churning effects of
periodic income fluctuations

A second, more incremental option offered in CMS's 2012 regulations
allows states to assess people's ongoing eligibility for Medicaid using
projected annual income instead of current monthly income.

A third option for states is to use Medicaid funds to purchase coverage
in qualified health plans in the Marketplace for people with incomes
below 138 percent of poverty.

A fourth approach is the Basic Health Program, an option under the ACA
that enables states to combine their Medicaid expansions with
Marketplace subsidies into a single program for individuals and families
with incomes of up to 200 percent of poverty.

A fifth option relates to how and when income changes are verified.

Finally, a state option that combines enrollment and marketing
strategies is to encourage certified Medicaid managed care plans to
enter state Marketplaces.

http://content.healthaffairs.org/content/early/2014/03/10/hlthaff.2013.1023.abstract

****


Comment by Don McCanne

The Affordable Care Act (ACA) compounded and locked into place our
highly fragmented, multi-payer method of financing health care. It is a
system that makes churning inevitable - moving in and out of various
plans or having no coverage at all, simply because program eligibility
varies depending on each individual's circumstances which often are in
an intermittent state of flux.

As if there was not already enough instability with employer-sponsored
and individual market plans, this study shows that under the two major
expansions of ACA, "approximately half of adults likely to be eligible
for Medicaid or subsidized Marketplace coverage will experience an
eligibility change within twelve months." Half in just the first year
alone. What after that?

Eligibility change is highly disruptive to care. It changes the amounts
that the individual or family will have to pay for premiums, cost
sharing, and non-covered services. It changes the provider networks that
vary under different plans. It can disrupt treatment programs. It can
result in gaps in coverage or no coverage at all. As is typical with
Medicaid, it can even change the willingness of physicians to accept the
individual or family as patients.

And that line about keeping the coverage you have if you want it? Within
one year, half will have a change in their eligibility. And the
recommendations of the authors will only tweak the instability, but the
fundamental problem will not be corrected. It is the ACA model that is
irreparably flawed.

Unless we change our model of financing, instability and disruption will
be the norm, not only because of shifting eligibility but also because
plans obtained through employment or in the market are undergoing
dramatic changes - even if less transparent - that will impact all of us
with greater cost sharing, narrower networks, and other changes that
none of us want. Do Americans really accept this mess as our preferred
option for health care financing?

Change to a single payer national health program and this all goes away.