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Churning, eligibility determination, and exchanges under the ACA

THE URBAN INSTITUTEChurning, eligibility determination, andexchanges under the ACAStan DornSenior FellowUrban InstituteWashington, DC19th Annual Princeton ConferenceMay 24, 2012


Part ICHURNING—THE FORCED MOVEMENT OFCONSUMERS FROM HEALTH PLAN TOHEALTH PLAN WHEN CHANGINGCIRCUMSTANCES MODIFY A CONSUMER’SELIGIBILITY FOR HEALTH PROGRAMS2


Total magnitude of churning• 29.4 million people willchange eligibility statusfrom year to year– Equals 31 percent of allenrollees in insuranceaffordability programsMedicaid/CHIPPeopleretainingeligibility,year to yearPeoplegaining orlosingeligibility68.8 million 26.4 millionHIX subsidies 8.2 million9.9 millionSource: Buettgens, Nichols and Dorn. Churning Under the ACA and State PolicyOptions for Mitigation. 2012.3


Year-to-year churning under the ACA: millionsof people changing eligibility statusTotal churning: 29.4 million19.53.06.9ExchangeSubsidies/IneligibleMedicaid/ExchangeSubsidiesMedicaid/IneligibleSource: Buettgens, Nichols and Dorn 2012THE URBAN INSTITUTE4


THE URBAN INSTITUTEWhy does churning matter?• Risk of becominguninsured• Disrupting continuity ofcare• Decreased incentive forinsurers to invest in theirmembers’ long-termhealth• Can require repayment oftax credits at year’s end• Administrative costs5


Reducing churning’s magnitudeType of churningBetween Medicaid and subsidies in theexchangeBetween Medicaid and ineligibility for allassistanceBetween subsidies in the exchange andineligibility for all assistanceStrategiesUse the Basic Health Program to offerMedicaid health plans up to 200 percentFPL – cuts churn by 16 percentEncourage or require the same healthplans to serve Medicaid and theexchangeImplement premium assistance for someMedicaid beneficiariesEncourage or require the same plans toserve multiple markets, inside andoutside the exchange, for individuals andsmall firmsTHE URBAN INSTITUTE6


Type of harmPotential loss of coverageReducing churning’s harmStrategiesReduce the amount of paperworkconsumers must complete to retaincoverage during eligibility transitionsMake coverage on both ends of thetransition affordable and appealingProvide intensive consumer assistance tohelp people navigate transitionsInterrupting clinical continuity of carePlan incentives to invest in members’healthImplement policies that preservecontinuity of care when people are forcedto change health plansProvide access to the same carriers inmultiple marketsRepaying tax credits at year’s endMuch longer discussion requiredAdministrative costs ??THE URBAN INSTITUTE7


Part IIELIGIBILITY8


THE URBAN INSTITUTEThe ACA’s vision of eligibilitydetermination• No wrong door Can apply at any program Can apply through any modalityo Web, phone, mail, in-person• Multiple programs are served by— One common application form One common eligibility determination process• Whenever possible, use data matches to verifyeligibility rather than ask consumers to providedocuments• Simultaneously achieve multiple goals Simple and streamlined enrollment increasesparticipation by eligible consumers Integrated, data-driven eligibility determination lowersadministrative costs Using data matches to verify eligibility reduces errors9


Much of the vision is being realized• No wrong doorCan apply at any programCan apply through any modality(web, phone, mail, in-person)• Multiple programs are served byone common application form• Whenever possible, use datamatches to verify eligibility ratherthan ask consumers to providedocuments• But what’s missing?THE URBAN INSTITUTE10


Who might not like a common eligibilityprocess?• Some states may not want afederally-facilitated exchangeto qualify people for Medicaidand CHIP• Some public employee unionsmay not want a non-profitcorporation or quasi-publicentity that runs an exchange todetermine Medicaid eligibilityTHE URBAN INSTITUTE11


The likely result: an option for bifurcatedeligibility determination• Unitary options Medicaid determines eligibility for all programs If someone applies to the HIX, the HIX determines eligibility for allprograms• The option for bifurcated eligibility determination If someone applies to the HIX, the HIX “assesses” Medicaid and CHIPeligibility. When an applicant appears eligible for Medicaid or CHIP, theHIX sends the application to the state for further processing.• Risks of bifurcated eligibility determination Eligible consumers do not receive coverage Administrative costs riseTHE URBAN INSTITUTE12


THE URBAN INSTITUTESolutions• State solutions Behind the scenes, Medicaid determines eligibilityfor all programso Already done in Massachusetts Under a Medicaid/CHIP/HIX interagency agreement,one system performs automated eligibility functionsfor all applications and all programs• Federal solution: “guardrails” to prevent bifurcatedeligibility determination from increasing consumerburdens and reducing coverage Final rules contain important safeguards More could be added, including:o HIXes apply Medicaid policies and procedures in assessingMedicaid eligibilityo Biforcated eligibility may not increase consumer burdensor delay application processingo CMS operational review precedes implementation ofbifurcated systemo Eligibility is determined in real time whenever it can beestablished by attestations and data matcheso Interagency agreements and verification plans are publiclyavailableo Within each state, a single, shared eligibility serviceperforms automated functions for all applications and allprograms13

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