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Churn Lower Than Expected but Still Problematic On Exchanges

By Erin Mershon, CQ Roll Call

October 4, 2016 -- Low-income adults aren't experiencing as much so-called "churn" in and out of the new health insurance marketplaces as expected, according to a new study from Harvard researchers.

About 25 percent of low-income adults had changed coverage in the 12 months prior to a survey by researchers at the Harvard T.H. Chan School of Public Health, according to a study published in the journal Health Affairs Tuesday. Churn can occur because consumers change jobs, lose their Medicaid eligibility, lose their exchange subsidy eligibility, or switch health plans because of other life changes that qualify them for so-called special enrollment periods.

Movement in and out of the exchanges remains a major complaint for insurance companies who participate in the marketplaces, who say that the ease with which people jump into and out of a plan, willingly or unwillingly, makes it difficult to plan for their health care costs. Insurers have also accused some consumers of gaming the system to get coverage when they need to pay for a pricey procedure, only to drop it soon after they've recovered. Both contribute to increasing insurance premiums, the companies say--which remains a major challenge for the 2010 health law (PL 111-148, PL 111-152).

Churn can also present problems for the consumers who shift plans. In the Harvard study, people who lost or gained marketplace or Medicaid coverage had disruptions in physician care and medication adherence, increased emergency room use and worse self-reported health status.

Before the 2010 health law passed, "churn" rates for people with nongroup private insurance were about 58 percent. The rate for Medicaid enrollees was 43 percent, and for those with employer-sponsored insurance, the rate was 12 percent.

The survey, which polled low-income adults in Kentucky, Arkansas and Texas, also found no discernable difference in churn rates between states that had expanded Medicaid and those that did not.

"Churning rates in the three states we studied do not appear to be as high as initially feared before implementation of the ACA's major coverage expansions," the researchers write. "[But] patients report that these changes in coverage reduce access to care and harm the continuity and quality of care. ... Policy makers and researchers will need to ensure that the ACA's impressive insurance gains are not compromised for many Americans by gaps in coverage and disruptions in care over time."

Several other studies also published Tuesday in Health Affairs examined marketplace enrollment. One, from two researchers at the Agency for Healthcare Research and Quality, showed that individuals who gained health insurance through the marketplace in 2014 were far more likely than those that did not to find a doctor or other provider and receive preventive care services.

Another, by Urban Institute researchers, showed that fewer marketplace consumers reported affordability issues in 2015 than in 2014. In 2015, the researchers found, enrollees living in states that chose not to expand Medicaid had more trouble paying family medical bills than those that lived in expansion states.

A third study addressed the affordability of the plans available on the exchanges--a key focus for both insurers and policymakers, as a number of companies have requested premium hikes that are soaring past 20 percent and 30 percent for 2017. The study, from researchers at the University of Pennsylvania, found that plans with especially narrow networks were 6.7 percent less expensive than plans with large networks.

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