Continuity of Medicaid Coverage in an Era of Transition A Working Paper Leighton Ku, PhD, MPH, Erika Steinmetz, MBA and Tyler Bysshe, MPH Department of Health Policy and Management Milken Institute School of Public Health George Washington University November 1, 2015
Medicaid covered 72.0 million beneficiaries in July 2015 (also including Children s Health Insurance Program enrollees), making it the nation s largest insurance program. Although 20 states are not currently expanding or planning to expand Medicaid 1, participation has grown by 13.2 million since mid-2013. 2 Medicaid offers primary, preventive, acute and long-term care insurance coverage to low-income children, adults, elderly and people with disabilities, who would otherwise have difficulty affording insurance. It provides affordable health coverage with relatively low cost-sharing burdens for impoverished beneficiaries. Medicaid can improve access to care and even reduce mortality and is less expensive than private insurance coverage. 3 4 5 While millions of people gain entry to Medicaid every year, millions are dropped from the program, even though many are still eligible. They may reapply and reenroll at a later time, thus churning off and back on to Medicaid. Interruptions in coverage can be caused by many factors, including minor fluctuations in income, moving to another area, failure to submit periodic reports to update records about income or other factors, or being unable to renew enrollment on a timely basis. After people lose Medicaid coverage, they may become uninsured or shift to another form of insurance, such as a Health Insurance Marketplace plan or other private coverage. This conundrum frustrates and confuses both patients and health care providers and can compromise both access to and quality of care. From a patient s perspective, the loss of Medicaid may mean that she cannot afford to see a doctor or get a prescription during the period without coverage. If some of their patients experience coverage gaps, physicians and other clinicians might not be reimbursed for medical care they provided. Even if a patient shifts from Medicaid to another type of insurance, problems may occur because provider networks or insurance requirements often differ between Medicaid and the other insurer, so that patients may be unable to get care from the same physicians or experience delayed or fragmented care. 6 In all these cases, the loss of continuous enrollment creates gaps that can have adverse consequences. This brief working paper updates earlier reports about the importance of continuity of enrollment in Medicaid. 7 8 The prior reports cited a substantial body of research indicating that even modest gaps in insurance coverage can have deleterious effects. If patients lose insurance coverage for even a few months, their medical care, access to prescription medications and other therapies can be interrupted. Some of the problems found when enrollment continuity was compromised include: greater use of emergency rooms, higher hospitalizations for conditions that can be mediated by effective primary care (e.g., asthma or diabetes), and higher rates of serious mental health problems leading to hospitalization. More recent research has continued to find that gaps in coverage are associated with delays in screening, detection and treatment of cancer which may result in higher mortality. 9 There may be other spillover effects as well: when parents have greater continuity of coverage, their children s coverage also improves. 10 This update is issued at a time when the nation s health delivery system is in transition, following in the wake of Medicaid expansions and creation of Health Insurance Marketplaces under the Affordable Care Act (ACA). It focuses on continuity within Medicaid; data are not yet available to determine how often people shift between Medicaid and Marketplace coverage or 2
whether there are gaps in which people are left uninsured. 11 Medicaid continuity gaps both harm quality and are inefficient. Analyses of the 2012 Medical Expenditure Panel Survey (MEPS) reveal that monthly Medicaid costs are lower when people are enrolled longer, as shown in Figure 1. An 18-64 year old adult enrolled for a full 12 months has estimated average monthly Medicaid costs of $326 per month, while someone enrolled for only one month incurs $705 in Medicaid expenditures per month and someone enrolled for six $800 $700 $600 $500 $400 $300 $200 $100 $0 Figure ES-1. Average Monthly Medicaid Costs for Adults Fall When They Are Enrolled for More of the Year, 2012 $705 months of the year has a monthly cost of $512. Results for children are similar: monthly Medicaid costs are much lower when children are enrolled for longer periods (Figure 2). (Methods for these analyses were described in earlier reports. The key difference is that these analyses use more recent 2012 MEPS data. A limitation of MEPS data is the data including months of insurance covered are self-reported by respondents and may be subject to reporting error.) In addition to the effects on medical costs, research also indicates that churning drives up administrative costs because of the additional efforts by program administrators, insurers and even clinicians in registering, deregistering and educating patients. 12 Clinicians may incur unreimbursed expenses if they care for a patient, but only later learn the person is no longer enrolled in Medicaid. $512 $326 1 2 3 4 5 6 7 8 9 10 11 12 Months of Year Enrolled in Medicaid Source: Analyses of 2012 Medical Expenditure Panel Survey data, controlling for age, gender, income, physical and mental health status, chronic health conditions or limitations, pregnancy, region of country, income, urbanicity, nativity, and receipt of SSI. The continuity of Medicaid coverage has improved somewhat in the past several years. The continuity ratio measures the portion of a year that an average beneficiary is enrolled in Medicaid. It is the ratio of the average number of Medicaid enrollees in a fiscal year divided by the unduplicated number of annual enrollees, based on Medicaid Statistical Information System data. A ratio of 100 percent would mean that every beneficiary participated every month in the year. Figure 2. Average Monthly Medicaid Costs Also Drop for Children 0 to 18 When They Are Enrolled Longer, 2012 $180 $163 $160 $147 $140 $120 $107 $100 $80 $60 $40 $20 $0 1 2 3 4 5 6 7 8 9 10 11 12 Months of Year Enrolled in Medicaid Source: Analyses of 2012 Medical Expenditure Panel Survey data, controlling for age, gender, income, physical and mental health status, chronic health conditions or limitations, region of country, income, urbanicity, nativity, and receipt of SSI. 3
At the national level, continuity ratios have increased from an average of 78.5 percent in 2006 to 81.2 percent in 2011-12 (Figure 3), although there are still large differences across the states. 1 On average, a typical Medicaid beneficiary is covered for fourfifths of the year and lacks Medicaid coverage for the remaining fifth of a year. Gaps are more common for non-elderly adults and less common for children, the elderly and those with disabilities. A more detailed state table is shown at the end of 95% 90% 85% 80% 75% 70% 65% this report. (Administrative data are also subject to potential reporting error. For example, if a state has changed its data system, anomalies may occur. Also, Medicaid provides retroactive eligibility, so in some cases the data system may show a person enrolled for months prior to the time he or she applied, so that actual gaps between spells of enrollment appear filled in even if the person did not actually use services or even think he or she was covered.) The ACA was designed to reduce the loss of insurance coverage in three ways. First, if states extend Medicaid eligibility to 138 percent of the federal poverty line, enrollees are less likely to drop off when their incomes rise since the overall eligibility band is wider. Second, if incomes rise beyond Medicaid eligibility limits, federal tax credits are available to help people purchase insurance through Health Insurance Marketplaces. Finally, there are web-based portals where people can apply for either Medicaid or the Marketplaces, also called one-stop shopping, facilitating enrollment and renewal. Recently proposed Medicaid managed care regulations would require managed care organizations take further steps to ease transitions between Medicaid and Marketplace coverage. 13 However, the development of Health Insurance Marketplaces creates new concerns about churning between Medicaid and Marketplace coverage due to income volatility and coverage gaps that may occur as people transition from one form of insurance to the other. 14 Information about this issue is still scarce. The state of Washington, for example, is reporting data about transitions of enrollees from the Marketplace to Medicaid and vice versa, 15 but this is uncommon and even those data do not indicate the extent to which people may disenroll from one program and experience at least a temporary gap without insurance. More serious gaps in coverage occur in the 20 states that are not currently expanding Medicaid because there is a larger gap between the state Medicaid eligibility line and Marketplace subsidy eligibility. In non-expansion states, the Medicaid income criterion is generally well below the poverty line for parents and there is very limited eligibility for adults without dependent children. 1 These data were obtained in Spring 2015. Updates may be available later. 4 Figure 3. Changes in Medicaid Continuity Ratios, 2006 to 2011-12 81% 79% 82% 86% 90% 90% 2006 2011-12* 80% 83% 68% 72% Overall Aged Disabled Children Adults Note: Analyses of Medicaid Statistical Information System data. 2006 data are all from FY 2006, but 2011/12 data are a blend of data from FY 2010 to 2012.
Because the income limits are tighter, a small increase in wages is more apt to trigger the loss of Medicaid eligibility. Recent data from the Census Bureau indicate that the percent of Americans who were uninsured fell from 13.3 percent uninsured in 2013 to 10.4 percent in 2014 and the reductions in uninsurance were greater in states that expanded Medicaid than those not expanding. 16 Since Medicaid caseloads are much larger than Marketplace enrollment, it is plausible that the number of people affected by interruptions within Medicaid is greater than interruptions between Medicaid and the Marketplaces. Thus, if more states expand Medicaid, continuity of coverage would improve and substantially more people who have the protection afforded by insurance coverage. A way to improve continuity of coverage in Medicaid would be to provide 12 months of continuous eligibility for adults, an option that is currently available only to children and pregnant women without requiring the state to obtain a waiver. Such an option is comparable to the periods of eligibility granted for employment-based insurance (which typically includes annual open enrollment periods) or for Medicare s Part D low-income subsidies. Prior research indicates that states adopting 12 months of continuous eligibility for children experienced greater continuous coverage. 17 Recent analyses by Katherine Swartz and her colleagues examined alternative methods to reduce churning in Medicaid and found that 12 month continuous eligibility was the most effective mechanism to reduce disruption. 18 There has been policy interest in this option. In 2013, the Medicaid and CHIP Payment and Access Commission recommended that Congress give states an equivalent option to provide 12 month continuous eligibility for adults. 19 In February 2015, the President s budget for FY 2016 proposed that states have an option to offer adults 12 month continuous Medicaid eligibility. 20 Legislation to adopt the use of 12 month continuous eligibility in Medicaid and CHIP for all adults and children in all states has been introduced in Congress. 21 5
5
Citations 1 Kaiser Family Foundation. Status of State Action on the Medicaid Expansion Decision. http://kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-theaffordable-care-act/ [Accessed on Oct. 22, 2015] 2 Centers for Medicare and Medicaid Services. Medicaid & CHIP: July 2015 Monthly Applications, Eligibility Determinations and Enrollment Report. September 28, 2015. 3 Finkelstein A, Taubman S, Wright B, Bernstein M, Gruber J, Newhouse JP, et al. The Oregon health insurance experiment: Evidence from the first year. NBER Working Paper 17190. July 2011. 4 Sommers B, Baicker K, Epstein A. Mortality and access to care among adults after state Medicaid expansions. N Engl J Med. 2012; 367(11):1025-34. 5 Ku L, Broaddus M. Public and private health insurance: Stacking up the costs. Health Affairs, 2008 Jun, 27(4):w318-327. 6 Orfield C, Hula L, Barna M. Hoag S. The Affordable Care Act and access to care for people changing coverage sources. Am J Public Health. Published online ahead of print. Oct. 8 2015. 2015:e1-7. Doi.10.2105/AJPH,2015.302867.) 7 Ku L, Steinmetz E. Bridging the Gap: Continuity and Quality of Coverage in Medicaid. Washington DC: Association of Community Affiliated Plans. Sept. 2013. 8 Ku L, MacTaggart P, Pervez F, Rosenbaum S. Improving Medicaid s Continuity and Quality of Care. Association for Community Affiliated Plans, July 2009. 9 Dawes A, Louie R, Nguyen D, et al. The impact of continuous Medicaid enrollment on diagnosis, treatment, and survival in six surgical cancers. Health Serv Res 2015. DOI: 10.1111/1475-6773.12237 10 DeVoe J, Crawford C, Angier H, et al. The association between Medicaid coverage for children and parents persists: 2002 2010. Matern Child Health J. 2015, Feb. epub ahead. DOI 10.1007/s10995-015- 1690-5 11 Kaiser Health News. Coverage 'churn' plagues patients whose incomes waver near Medicaid line. April 7, 2015. http://www.healthcarefinancenews.com/news/coverage-churn-plagues-patients-whoseincomes-waver-near-medicaid-line. 12 Fairbrother G, Dutton MJ, Bachrach D, et al. Costs of enrolling children in Medicaid and SCHIP. Health Affairs. 2004; 23(1):237-43. 13 Center for Medicare and Medicaid Services. Notice of proposed rulemaking: Medicaid and Children s Health Insurance Program (CHIP) programs: Medicaid managed care, CHIP delivered in managed care, Medicaid and CHIP comprehensive quality strategies, and revisions related to third party liability. Federal Register, June 1, 2015. 14 Sommers B, Rosenbaum S. Issues in health reform: how changes in eligibility may move millions back and forth between Medicaid and Insurance Exchanges. Health Affairs 2011 Feb; 30(2): 228-236. 15 Washington Health Benefit Exchange. Health Coverage Enrollment Report. March 2015. 16 Smith J, Medalia C. Health Insurance Coverage in the United States: 2014. Current Population Reports P60-253. Washington, DC: US Govt Printing Office. 2015. 17 Ku, L., Steinmetz, E., Bruen, B, Continuous eligibility policies stabilize Medicaid coverage for children and could be extended to adults with similar results, Health Affairs, 32(9): 1576-82, Sept. 2013. 18 Swartz K, Short PF, Graefe D, Uberoi N. Reducing Medicaid Churning: extending eligibility for twelve months or to end of calendar year is most effective. Health Affairs, 2015; 34(7): 1180-87. 1
19 Medicaid and CHIP Payment and Access Commission. Report to the Congress on Medicaid and CHIP. Washington, DC: MACPAC; Chap. 2, p. 21 32. Mar. 2013. 20 U.S. Department of Health and Human Services. Fiscal Year 2016: Budget in Brief. February 2015. 21 Two bills proposed in the 114 th Congress include: H.R. 700 Stabilize Medicaid and CHIP Coverage Act (introduced by Congressmen Green and Barton) and S. 428 Stabilize Medicaid and CHIP Coverage Act of 2015 (introduced by Senator Brown). 2