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Tag: Job loss

Churn and the ACA

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Prior to the Affordable Care Act (ACA), with 47 million Americans uninsured, advocates and policy experts focused on expanding health insurance coverage for those who lacked it. Now that the law has broadened access to insurance, states are turning their attention to protecting enrollees from disruptions when they transition from one type of coverage to another, movement known as churn.

Churn is typically caused by a change in eligibility status, which itself stems from fluctuations in income, loss of a job, or changes in family circumstance, such as pregnancy. Short of a system, such as single-payer, where people may stay on the same plan for most of their lives, churn is inevitable. Indeed, in our fragmented health insurance system, millions of people naturally churn over the course of a given year, moving from employer-provided insurance to private insurance, or from private insurance to Medicaid, and so on. At low income levels, employment is particularly unstable, leading to high levels of churn among that population. For example, a newly-eligible Medicaid beneficiary (in an expansion state) who experiences a change in income over the course of a year—such as picking up an extra retail job during the holiday season—may lose his or her Medicaid eligibility as a result. Switching over to the exchange for new coverage could mean a totally different network of doctors, new drug formularies, and higher premiums and cost-sharing, not to mention the complexity and burden of going through a new and different enrollment process.

Is the ACA to blame for churn?  No—in fact, the ACA directly reduces one form of churning, and offers tools to mitigate the impact of other forms. Before the ACA, millions churned off insurance coverage for all the reasons mentioned above. And after losing coverage, many people—especially those with preexisting conditions—found it hard, if not impossible, to get it back. Because the ACA makes the individual health insurance market more accessible and affordable, the law creates a new culture of coverage with a continuum of options, and actually cuts down on churning into uninsured status.

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