Americans 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 (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.
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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 – 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:
- 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.
- Although individuals shop for plans, those with coverage from employer plans tend to do so at a low rate. In contrast, more than half of marketplace enrollees switched plans between 2014 and 2015. This may explain why, in the second year of the individual mandate, switching rates are also higher, compared to 2013.
- 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.
- 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 (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 firstname.lastname@example.org, or on Twitter to @IyueSung and @JoshGray_HIT.
Iyue Sung, phd is director of athenaResearch.