How Is Health Reform Impacting Insurance Switching Patterns?

Screen Shot 2015-07-18 at 6.56.00 AMAmericans typically don’t switch health insurance, and that has not changed much with healthcare reform. Despite controversy with the converse scenario – the ability to keep the same insurance – and the introduction of health insurance marketplaces, data from ACAView suggests switching behavior has been modest.

For this latest ACAView research, our team set out to determine how the ACA’s insurance coverage expansion has influenced patient behavior in switching insurance coverage. We looked at patients’ switching patterns, and how those have shifted for a subset of patients who have visited primary care providers at the same practice at least once a year between 2013 and 2014 and/or between 2014 and 2015.

Our research revealed five key findings:

In Medicaid expansion states, over 40% of uninsured patients obtained insurance the following year, in both 2014 and 2015. In comparison, in non-Medicaid expansion states, about 25% of previously uninsured patients obtained insurance during the same time periods. Conclusion: Medicaid expansion has allowed a higher proportion of previously uninsured patients in continuous care to obtain insurance.

In Medicaid expansion states, the proportion of commercially insured patients switching to Medicaid coverage – though rare – has doubled. In 2014, 1.2% of commercially insured patients in continuous care switched to Medicaid coverage. Prior to coverage expansion, only 0.6%  switched to Medicaid coverage in the subsequent year. (In 2015, this proportion increased to 1.6%.)

With coverage expansion, the percentage of commercially insured patients who switch coverage the subsequent year has increased: from 15.0% pre-expansion to 18.3% in 2014 and 17.3% in 2015. This may occur because some commercially insured patients switch to plans on the health insurance marketplaces because they are eligible for subsidies.

The switching behavior of people who changed plans or payers had no notable impact on utilization. Whether patients switched commercial insurance plans with the same payer, or they switched payers, there were no clear changes in either visit frequency or relative value units (RVUs) per visit.

Patients with a range of chronic conditions[1] (high cholesterol, hypertension, and diabetes) are less likely to switch insurance coverage. In contrast, patients diagnosed with mental disorders were more likely to receive insurance coverage.

Want to dig deeper into our research findings on this topic? Read further for more details:

In Medicaid expansion states, 44% of uninsured patients obtained insurance in 2014. In comparison, 24% of previously uninsured patients in non-Medicaid expansion states obtained insurance in the same time period.

Figure 1 below compares the insurance that patients had at the beginning of a given year (shown along the left) with the type of insurance they had the subsequent year (listed at top), for Medicaid expansion states.

In general, people tend to keep the same type of insurance from year to year. For example, in each of the three years we considered, nearly 98% of commercially insured individuals maintained commercial insurance the following year in expansion states.

The notable exception: Uninsured patients. In 2013, 75% of uninsured patients remained uninsured the following year. But once the ACA’s coverage expansion provisions were made available, these levels dropped to 56.2% in 2014 and 57.3% in 2015. In other words, the proportion of uninsured patients obtaining insurance the following year increased from 25% before the ACA to about 44% following its implementation.


In contrast, fewer uninsured patients obtained insurance in non-expansion states (see Figure 2). However, this group of individuals is increasingly picking up commercial insurance coverage.

In 2014, 18% of previously uninsured people gained commercial insurance, up from 11.5% in 2013. The pattern continued in 2015, in which 21.9% of individuals who were uninsured in 2014 gained commercial insurance.

Furthermore, in 2015, a total of 28.2% of uninsured patients obtained some kind of coverage (including 3.2% joining Medicaid, and 3.1% obtaining other coverage). This compares to just 18.2% of 2012 uninsured patients obtaining coverage in 2013.

Summary: The proportion of patients obtaining any insurance increased in both expansion and non-expansion states, with a much larger increase in expansion states.


In Medicaid expansion states, the percentage of commercially insured patients switching to Medicaid coverage has doubled.

Patients transitioning from commercial insurance to Medicaid is a rare event[2] – just 0.6% of patients who had been commercially insured switched to Medicaid in 2013 (Figure 1). As small as this rate is, it doubled in 2014, increasing to 1.2%, and then 1.3% in 2015.

We have not analyzed the reasons for this change but speculate this: As Medicaid plans become more generous with eligibility requirements, more people in low-wage jobs may qualify for Medicaid coverage, and find Medicaid preferable to the high out-of-pocket costs associated with many commercial plans.

With coverage expansion, the percentage of commercially insured patients who switch coverage has increased: from 15% pre-expansion to 18.3% in 2014 and 17.3% in 2015.

Not only has the uninsured rate declined under the ACA, but a modest though noticeable increase in switching has occurred by individuals already insured on commercial plans.

In 2014, 5% and 10.8% of commercially insured individuals switched plans and commercial payers, respectively, while another 2.5% left commercial coverage altogether (see Figure 3). These figures are up from those in 2013, in which 3.9% of commercially insured patients switched plans, 9% switched payers, and 2.2% left commercial coverage. These higher switching rates persist into 2015.


Several explanations for this increased switching are possible:

  1. People who were previously commercially insured became eligible for premium and cost-sharing subsidies via new marketplace plans and switched to take advantage of this benefit.
  2. Although individuals shop for plans, those with coverage from employer plans tend to do so at a low rate[3]. In contrast, more than half of marketplace enrollees switched plans[4] between 2014 and 2015. This may explain why, in the second year of the individual mandate, switching rates are also higher, compared to 2013.
  3. The increase may, in part, be driven by the economy. Consecutive declines in unemployment rates (which coincided with health care reform) may lead to more job switching and, therefore, insurance switching.
  4. The emergence of employer-sponsored exchanges may be increasing switching behavior across commercial plans.

The switching behavior of people who changed plans or payers had no notable impact on utilization.

When people switch commercial plans, utilization changes little, at least for primary care providers.  Figure 4 shows that, among patients who switched insurance plans, visits to PCPs occurred at approximately the same frequency after switching, hovering around 2 to 2.1 visits per patient in the first four months of the year.

For patients who switched commercial payers, there was also very little change in utilization after switching. This consistency suggests that regardless of what factor – e.g. shopping or new job – lead to an insurance switch, utilization patterns remain fairly stable.


Patients with a range of chronic conditions[5] (high cholesterol, hypertension, and diabetes) are less likely to switch insurance coverage.

As part of our research, we considered whether patients with greater health needs are more or less likely to switch plans or insurers. Figure 5 compares the proportion of visits in which four chronic diseases – high cholesterol, diabetes, high blood pressure and mental disorders – are diagnosed. We found that individuals with a lower rate of diagnosis of these conditions were more likely to switch commercial insurance coverage.

This pattern persists whether an individual switches insurance categories (e.g. commercial to Medicaid), payers, or specific coverage plans. This may occur because individuals with more complex medical profiles are more reluctant to switch insurance, and find it important to stay with their provider. Alternatively, these individuals are more likely to utilize care at a much higher level, and may be more insensitive to differences in total out-of-pocket expenditures.

In contrast, healthier individuals may be more open to switching. Given their health status, there is less risk in switching insurance coverage, because they are less likely to utilize care and are therefore willing to risk the increased cost of plans with higher total out-of-pocket fees.


The athenaResearch team will continue to monitor and expand our analysis of insurance switching behavior in the wake of the Affordable Care Act. In particular, we will analyze the impact that insurance coverage switching has on patient financial obligations for physician services.

You can learn more about our ACAView initiative on the athenahealthCloudView blog or at on RWJF. We welcome feedback and suggestions in the comments below, through email at athenaresearch@athenahealth.com, or on Twitter to @IyueSung and @JoshGray_HIT.

Iyue Sung, phd is director of athenaResearch.


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6 replies »

  1. Thanks JtFD,

    It does look like the marketplace encourages shopping (nyti.ms/1HM1eCq), and some of that is reflected in our data (Figure 3, which shows an increase in switching).

    However, given that most people get their insurance through their employers and tend to keep their insurance, it’s unlikely we’d see a dramatic jump in switching.


  2. Hi John,

    Thanks for the feedback and question!

    We’re not surprised that there are systems being hit hard. But a couple of factors may explain the discrepancy.

    First, Athena’s network tends to reflect what’s happening in community medicine. This includes some large health systems, but on the whole, represents a large number of independent practices, many of which may choose to not participate in marketplace networks.

    Second, it’s unlikely that our population of patients who switch to marketplace plans would have a large impact on moving overall switching rates, since they represent a small proportion of our network.

    So, while there surely are practices who experienced a dramatic uptick in work intensity (which, we assume, is a good thing), it doesn’t appear that in aggregate, “the network” has.


  3. This makes sense, both Iyue’s stats and what John reports. It’s normal for people who are already covered and have a doctor relationship not to want to switch plans unless there is some big need to.

    It is also not surprising that some system’s PCPs are getting slammed by people who are new to that system — especially if that particular system was included in the network of plans which put out a particularly enticing premium at the Bronze and Silver levels. They will get more than their share of both newly insured and people switching from other plans.

    Does a low level of switching mean that the market mechanism is not working? Not really. It means that healthcare organizations and health plans can be comfortable if they can feel that they are being competitive and are not outliers at one end or another.

    We see that for 2016 a number of low-end outliers in the health plan market are having to revise their premiums upward substantially. They will experience more switching as those who are shopping on price alone will go to the new low-price magnet.

    Here is the most important point to notice: As it gets more strongly established, the market discipline will act differently on health plans and healthcare providers. On health plans, the market will push their premiums to the middle of the pack or ideally just below it to gain and maintain market share.

    Providers, though, have other routes to market share than just getting into the narrow networks of the insurance companies that service their regions. These other routes includes direct contracting with self-funded employers and other large purchasers, establishing “medical tourism” practices in specific specialties, building onsite clinics for employers and specific populations of Medicare and/or Medicaid recipients, engaging in innovative Medicaid programs, and an array of other methods.

    This means that health plans have to strive to keep their premiums in the low/middle range, but have no incentive to drive down the real costs of healthcare in their region. But healthcare providers can thrive by developing innovative business models that provide better care at lower costs directly to their customers — the consumer and large purchasers.

  4. Iyue –

    Love the direction you guys are taking with this.

    One question — your findings on the work intensity question are likely to come as a surprise to many PCPS. I’m hearing very different things from my sources in California.

    PCPs are saying they are being flooded by a wave of switchers.

    At one nationally-regarded system that shall remain nameless there are reports that the PCPs are getting killed every day (hearing this from multiple docs, many directions) by the influx of switchers. The theory is that management took a wait and see to the ACA before staffing up, and the front line are now paying the price ..


  5. Here’s my question : what does this mean?

    I’m no expert: but if the general idea of a marketplace is for customers to force competition between plans, doesn’t this mean the market isn’t functioning like a market?

    Shouldn’t we see some switching?

    My guess is that consumers are doing the same thing everybody else: playing wait and see. I bet next year we see a lot more movement

    If we don’t, that’s a sign something is very wrong

  6. Brokers writing group business tell us they are switching
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    You can guess that the difference in premiums are substantial
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    Don Levit