The chal­lenge of churn­ing

In­sur­ers and states seek to en­sure cov­er­age con­ti­nu­ity be­tween Med­i­caid and pri­vate plans

Modern Healthcare - - REFORM UPDATE - By Vir­gil Dick­son

Af­ter Stella Marie Means re­tired in March at age 55 from a cler­i­cal job in the health­care in­dus­try, she wor­ried about how she and her hus­band would be able to main­tain their health cov­er­age and af­ford their med­i­ca­tions. Her hus­band was not em­ployed, and be­tween them, they had 20 pre­scrip­tions.

Re­tir­ing meant the West Bloom­field, Mich., cou­ple’s house­hold in­come dropped from $4,000 a month to $1,200. Get­ting cov­er­age through CO­BRA was too ex­pen­sive. Healthy Michi­gan, the state’s ex­panded Med­i­caid pro­gram for adults earn­ing up to 138% of the fed­eral poverty level, was their only op­tion. They feared the health­care they would get through Med­i­caid would be poor qual­ity. But they joined the Mid­west Health Plan, a Med­i­caid man­aged­care plan, and have been pleas­antly sur­prised.

“You think you’re go­ing to get doc­tors that are not good enough to get on the main floor with providers in pri­vate plans, and that you’re not go­ing to be able to get the pre­scrip­tion drugs you need, es­pe­cially if they are name brand,” Means said. “For­tu­nately, we’ve been able to keep our same doc­tor and our pre­scrip­tions.”

The Means’ cov­er­age shift be­cause of a change in in­come is known as “churn,” where peo­ple go from pri­vate cov­er­age to Med­i­caid or vice versa, of­ten with a spell of be­ing unin­sured. More than 28 mil­lion low-in­come adults could ex­pe­ri­ence enough of a change in in­come within six months of en­roll­ment in an Oba­macare ex­change plan to churn be­tween their pri­vate plan and Med­i­caid or move be­tween pub­lic or pri­vate cov­er­age and be­ing unin­sured, ac­cord­ing to a Health Af­fairs ar­ti­cle in April.

Churn­ing mat­ters a lot to pa­tients be­cause mov­ing from one type of cov­er­age to another could mean los­ing ac­cess to their es­tab­lished health­care providers, hav­ing their cov­ered ben­e­fits change, or pay­ing more or less in pre­mi­ums and cost shar­ing. Some states are seek­ing so­lu­tions to mit­i­gate churn to en­sure con­ti­nu­ity of care. Strate­gies in­clude al­low­ing Med­i­caid ben­e­fi­cia­ries to stay in the pro­gram for up to 12 months even if their in­come in­creases, or es­tab­lish­ing a state Ba­sic Health Pro­gram, which in­volves a state us­ing fed­eral dol­lars to set up a health plan for peo­ple whose in­come is above the Med­i­caid thresh­old but below 200% of the poverty level.

For their part, in­sur­ers have of­fered or are plan­ning to of­fer Med­i­caid and ex­change plans to en­sure con­ti­nu­ity of cov­er­age for peo­ple whose in­come changes. Dur­ing the first open-en­roll­ment pe­riod that ended in March, ex­changes for 32 states and the District of Columbia had par­tic­i­pat­ing in­sur­ers that of­fered an ex­change plan and a Med­i­caid plan, ac­cord­ing to the As­so­ci­a­tion for Com­mu­nity Af­fil­i­ated Plans, which rep­re­sents 58 not-for-profit safety net health plans in 24 states. The as­so­ci­a­tion es­ti­mated that 41% of 286 ex­change in­sur­ers na­tion­ally of­fer both ex­change and Med­i­caid plans in the same states.

For some providers, churn is a fo­cal point in their Oba­macare outreach strat­egy. Af­ter Michi­gan opened en­roll­ment for its ex­panded Med­i­caid in April, Detroit Med­i­cal Cen­ter let con­sumers know about it. “We made sure to let peo­ple know that if their sit­u­a­tion changed, whether it be a loss of work or a di­vorce or what­ever the bad thing was, they were still el­i­gi­ble for in­sur­ance,” said Con­rad Mal­lett, the hos­pi­tal’s chief ad­min­is­tra­tive of­fi­cer.

When pa­tients churn from Med­i­caid to ex­change plans,

how­ever, that can cre­ate pay­ment prob­lems for providers. Ex­change plans of­ten have high de­ductibles and cost-shar­ing. Med­i­caid pa­tients are used to hav­ing very lim­ited cost­shar­ing, so they don’t nec­es­sar­ily un­der­stand their fi­nan­cial re­spon­si­bil­i­ties un­der a pri­vate plan’s de­ductible or coin­sur­ance, said Craig Hauben, chief sales and mar­ket­ing of­fi­cer at NSLIJ CareCon­nect, a health plan owned by North Shore-Long Is­land Jewish Health Sys­tem, based in Great Neck, N.Y. “These in­di­vid­u­als are used to go­ing to a doc­tor and just hav­ing it cov­ered,” he said.

On the other hand, ex­change plan en­rollees in sil­ver-tier plans who have in­comes un­der 250% of the poverty level qual­ify for fed­eral cost-shar­ing sub­si­dies that can re­duce their outof-pocket costs to as lit­tle as 6% of their to­tal med­i­cal costs.

CareSource, an Ohio-based not­for-profit Med­i­caid plan, of­fers an ex­change plan, called CareSource Just4Me, to ex­pand its mar­ket and en­sure con­ti­nu­ity of cov­er­age and care for mem­bers whose in­comes in­crease and be­come in­el­i­gi­ble for Med­i­caid. The com­pany fo­cused its outreach on peo­ple earn­ing be­tween 138% of poverty—the cut­off for Med­i­caid in Ohio and other states that ex­panded the pro­gram un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act—and 250% of the poverty level. The strat­egy paid off: Just4Me en­rolled 36,000 peo­ple on the ex­change in Ohio as of June.

“We lever­aged our in­fra­struc­ture and ex­per­tise of work­ing with lower-in­come in­di­vid­u­als to ap­peal to this newer pop­u­la­tion,” said Scott Streator, a vice pres­i­dent at CareSource. “The typ­i­cal com­ment we hear is that this was some­thing they al­ways wanted but could never af­ford.”

Now, CareSource in­tends to in­tro­duce Just4Me in Ken­tucky, a Med­i­caid ex­pan­sion state where it now serves nearly 70,000 Med­i­caid ben­e­fi­cia­ries, and in In­di­ana, a non-ex­pan­sion state that would be a new mar­ket for CareSource.

The num­ber of in­sur­ers of­fer­ing ex­change and Med­i­caid plans is likely to in­crease as more com­pa­nies fo­cus on churn. For in­stance, Florida-based Wel­lCare Health Plans, which of­fers Med­i­caid plans in ex­pan­sion states in­clud­ing Hawaii, Ken­tucky and New York, and in non-ex­pan­sion states such as Florida and Ge­or­gia, is mulling over where to launch ex­change plans. “The key is en­sur­ing that our mem­bers have ac­cess to sim­i­lar ben­e­fit de­signs, that the net­works over­lap to sup­port con­ti­nu­ity of care and that our mem­bers have ac­cess to op­tions they can rea­son­ably af­ford,” said Dr. Steven Gold­berg, se­nior vice pres­i­dent and chief med­i­cal of­fi­cer at Wel­lCare. To achieve this, the com­pany will have to of­fer a sim­i­lar provider net­work in its Med­i­caid and ex­change plans.

Even when an in­surer of­fers both plans, the tran­si­tion isn’t al­ways seam­less for peo­ple whose eco­nomic cir­cum­stances change. They have to in­form the state Med­i­caid agency that their in­come has in­creased or they no longer meet the in­come eli­gi­bil­ity re­quire­ments. Af­ter that, they qual­ify for spe­cial en­roll­ment in a pri­vate plan on the ex­change and may be el­i­gi­ble for a pre­mium tax credit.

Some states have, or are plan­ning, strate­gies to ad­dress churn. For in­stance, Delaware has es­tab­lished rules to ease the tran­si­tion for peo­ple los­ing pri­vate cov­er­age, such as re­quir­ing pri­vate plans to con­tinue to pay for pre­scrip­tions and treat­ment that al­ready were in progress, for a set pe­riod of time. Mary­land has sim­i­lar re­quire­ments for plans on its ex­change. “That ben­e­fits us to the ex­tent that peo­ple should not ex­pe­ri­ence com­plete lapses in cov­er­age and, there­fore, are more likely to main­tain bet­ter over­all health,” said Stephen Groff, Delaware’s Med­i­caid direc­tor.

For Amer­i­cans who work sea­son­ally, their in­comes may fluc­tu­ate above and below the Med­i­caid-eli­gi­bil­ity level. Ken­tucky has adopted a pro­vi­sion that al­lows peo­ple with fluc­tu­at­ing in­comes to stay in Med­i­caid since their earn­ing pat­tern in­di­cates they likely will be back within the Med­i­caid thresh­old be­fore year-end, said Jill Mid­kiff, a spokes­woman for the Ken­tucky Cabi­net of Health and Fam­ily Ser­vices.

Ken­tucky is one of a num­ber of states that are ex­plor­ing a “bridge plan” un­der the Ba­sic Health Pro­gram pro­vi­sion in the

Af­ford­able Care Act. The plan would pro­vide sub­si­dized cov­er­age for in­di­vid­u­als and fam­i­lies whose in­come is be­tween 138% and 200% of the poverty level, en­sur­ing con­ti­nu­ity of care for in­di­vid­u­als whose Med­i­caid eli­gi­bil­ity fluc­tu­ates.

Ore­gon and West Vir­ginia also are con­sid­er­ing launch­ing a Ba­sic Health Pro­gram. Min­nesota and Wash­ing­ton al­ready were op­er­at­ing a ver­sion of a Ba­sic Health Plan years prior to the ACA’s pas­sage. States such as Arkansas, Iowa and Penn­syl­va­nia that have ex­panded or pro­posed to ex­pand Med­i­caid through the pri­vate-plan op­tion—tak­ing the fed­eral Med­i­caid ex­pan­sion money and us­ing it to buy ex­change cov­er­age for adults earn­ing up to 138% of the poverty level—ar­gue that their ap­proach bet­ter mit­i­gates the neg­a­tive ef­fects of churn. Un­der the pri­vate-plan model, if ben­e­fi­cia­ries ex­pe­ri­ence an in­come in­crease, they can keep their pri­vate plan and their same net­work of providers, said Kate Luck, a spokes­woman for Arkansas’ De­part­ment of Hu­man Ser­vices.

Since mov­ing from pri­vate cov­er­age to Med­i­caid in June, Means said she’s been sur­prised to see her and her hus­band’s out-of-pocket costs drop. Of­fice vis­its now re­quire co-pays of $2 ver­sus the $25 they spent when they had pri­vate in­sur­ance. They used to have to spend $30 for each brand-name drug and $15 for each generic drug. Now, they get all 20 of their pre­scrip­tions for a com­bined to­tal of $76. “We are ex­tremely happy,” Means said.

CareSource, an Ohio-based not-for-profit Med­i­caid plan, fo­cuses outreach for its ex­change plan on peo­ple earn­ing be­tween 138% and 250% of the fed­eral poverty level.

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