Guest Post: Medicaid Enrollees: Churning Between Medicaid & Private Plans

"Churning" describes the process by which an estimated nine million people move off Medicaid every year when their income increases, perhaps because of a seasonal job, and then move back when their income drops. Usually, people churning out of Medicaid have remained without health care coverage until they re-enroll again.

Now, because of the Affordable Care Act, people who leave a Medicaid managed care plan may temporarily qualify for subsidized insurance through the exchanges, but they may experience gaps in coverage or have to change health plans or doctors as they move back and forth. The director of the National Association of Medicaid Directors, quoted in a Kaiser Health News article, explains the challenge:

“You want people to have consistent insurance coverage, whether you’re dealing with someone who’s got mental health and substance abuse issues or a variety of undertreated chronic conditions. If you get them into Medicaid at one point and get them stable and on a plan of care, you don’t want a transition into a different plan to set them back, and then have those people rebound back into Medicaid.”

Nearly 30 million Americans on Medicaid are already in private managed care plans to which the states pay a fixed amount monthly. Some states have begun to find solutions to the problems caused by churning: Nevada will require Medicaid managed care companies to offer a comparable plan on the exchanges starting this year, Washington will help health care companies in the exchange also become Medicaid plans, and Delaware requires companies in its exchange to continue to cover approved medical treatment and medications for new members coming from Medicaid. Oregon is also considering a new policy.

Churning poses a complication for those trying to record the number of people who enroll in Medicaid or private plans through the exchanges. Will the enrollees moving off Medicaid, perhaps temporarily, also be counted as signups in private plans in the same year?

Far more important, however, is this statement by the chief medical officer for the Oregon Health Authority:

“The bottom line is we want to make sure people and their families are getting the care they need and that it’s a smooth transition."