Arielle Levin Becker reports about churn in Connecticut:
37% of those who signed up thru exchange outside open enrollment period previously had Medicaid.
— Arielle Levin Becker (@ariellelb) April 21, 2016
What this means is in the past two months, people who had qualified for Medicaid either through Expansion or through the legacy process are moving to Exchange and seeing their deductibles be reset to zero.
Medicaid is a combination of income determined and condition determined. People with fairly low incomes that qualify for Medicaid will often experience significant income volalitity. Someone who is making 130% of Federal Poverty line and thus is qualified for Medicaid Expansion could pick up an extra shift or get a $.50 an hour raise that bumps their income to 140% FPL. That moves them from Medicaid qualified to Exchange qualified. Moving to Exchange has three major implications. The first is the individual is paying out higher premiums and higher cost sharing if they live in a simple Expansion state. It is a fairly significant marginal income tax rate. Secondly, the Medicaid and Exchange insurers have almost no incentive to focus on preventive care as it is highly probable that this class of individual will have a fairly short stay on whatever policy they currently have.
Finally, the biggest problem in American health financing is that we pay too much for each unit of service. Medicaid is usually the lowest level of payments to hospitals and doctors. Exchange, if the pricing is based on Medicare plus a little bit, will often pay 20% or more for the same service, the same test, the same brand name prescription. If the Exchange plan is paying based on commercial rates, the Exchange plan could be paying twice as much per unit of service.
What is the policy solution?
The ideal solution would be to allow people to lock in for a year in whatever system that the qualify for during an open enrollment period. If someone is Medicaid qualified in January, they would be Medicaid qualified for the entire year even if they tripled their income during the course of the year. There could be a work-around that people would have to pay premiums based on a sliding scale after they leave normal qualification range. The same would apply to Exchange plans where subsidies would be wrapped around and cost sharing reductions would be applied as people saw their incomes dropped.
HinTN
That would be far too sensible and compassionate.
Rob in CT
That sounds like a good solution to the particular problem.
This is more evidence, for me, that means-testing sucks.
Miss Bianca
Wait…it’s not like that already??
Davis X. Machina
Related – this cartoon is more than 50 years old….
Luthe
My issue with this is the disparity in providers who accept Medicaid vs the ones who accept Exchange plans. I switched from Medicaid to the Exchange ASAP because the number of mental health providers in my area who accept Medicaid is fairly small and doesn’t include my long-time APRN. Keeping people on a stable plan for a year is a great idea to reduce churn, but it would be even better with a large Medicaid network.
Richard Mayhew
@Luthe: Tweak it to allow people to buy-into Medicaid or go to Exchange once their income gets too high… that could work really well since Medicaid would be essentially minimal monthly premium for somone at 140% FPL due to its cost advantage over Exchanges