Health Insurance Retention Seen As Key To Reducing The Number Of Uninsured Americans

New York City, December 3, 2002—The number of uninsured, low-income children would decline by nearly 40 percent and the number of uninsured adults would decline by more than one-quarter if every person with public or private health coverage at the beginning of a given year retained it through the next 12 months, according to a new report from The Commonwealth Fund. The report, by Leighton Ku and Donna Cohen Ross of the Center on Budget and Policy Priorities, argues that improving insurance retention is both a cost-effective and under-appreciated way to increase the number of insured individuals. The authors recommend strategies that federal and state governments and employers could use to improve retention, such as 12-month continuous eligibility and automatic renewal for Medicaid and CHIP for low-income families, helping people retain coverage when they shift from welfare to work by simplifying rules that let them keep Medicaid coverage, and by changing open enrollment rules so they are eligible for their employer's insurance plan when their public insurance lapses. Insurance retention is critical, the authors say, because research shows that stable health insurance coverage improves access to health care and continuity of care. "Getting people insured is half the battle—keeping them insured is the other half," said Karen Davis, president of The Commonwealth Fund. "No one should lose coverage because their family or economic circumstances change. Growing up, finding a job, or becoming unemployed shouldn't mean becoming uninsured." In their report, Staying Covered: The Importance of Retaining Health Insurance for Low-Income Families, Ku and Ross analyze why people lose their insurance over the course of a year. A change in job or unemployment, divorce or death of a spouse, an increase in salary that disqualifies workers for public insurance, are all events that could mean a change in health insurance coverage. In addition, barriers such as complex eligibility rules and renewal procedures for public insurance, and waiting periods to enroll in employer plans, may prevent many of those who would otherwise be eligible from joining public or private insurance plans. Ku and Ross estimate that millions of people lose insurance for reasons that could be avoided by implementing one or more strategies detailed in the report. Some of the thirteen strategies outlined include: Improve Retention in Medicaid and CHIP

• 12-month continuous coverage - States have the option to guarantee Medicaid or CHIP coverage for children for 12 months regardless of changes in family income or circumstances. Federal legislation could be modified to allow a similar provision for low-income parents.
• Coordinating Medicaid and CHIP renewal - Many states use joint Medicaid/CHIP applications; they could use joint renewal forms as well.
• Using passive renewal - Similar to the way private insurance is handled in the workplace, children's Medicaid or CHIP coverage could be automatically renewed if their parents report no changes in family circumstances.
• Protect families from losing coverage due to missing premium payments - Lower premiums that cause people to drop coverage, or collect them on an annual basis. Some states bar families from re-joining Medicaid or CHIP programs for a time period even if they pay past-due premiums. States could adopt policies that make programs more responsive to low-income families' changing circumstances.
• Simplifying Medicaid and CHIP enrollment - States could do more to permit families to apply by mail or in person or at community settings, simplify application forms, and minimize verification requirements, easing reenrollment for those who have lost coverage.

Help People Move Between Public and Private Coverage

• Eliminate waiting periods for CHIP or Medicaid - States could reduce or eliminate waiting periods—designed to protect against "crowd-out"—for families who drop coverage because their premiums exceed a certain percentage of their income.
• Simplify Transitional Medical Assistance (TMA) - A change in federal rules could make it easier for families moving from welfare to work to enroll in this program. Many eligible workers do not enroll in TMA because of complex rules and paperwork.
• Make it easier for workers to shift to employer coverage from Medicaid or CHIP - Federal legislation could be modified to help employees who lose CHIP or Medicaid join their employer's health plan without having to wait for open enrollment.

"On average, it costs our MetroPlus Health plan nearly two months of their health insurance premium to enroll and re-enroll plan members," said Benjamin Chu, president of the New York City Health and Hospitals Corporation (NYCHHC). "These administrative costs would be much better directed at efforts to improve the health of our patients." MetroPlus Health is a plan owned by the NYCHHC serving the city's Medicaid, CHIP, and Family HealthPlus beneficiaries.