Medicaid 'Churning' Could Become Larger Problem Under Obamacare

Monday, 06 Jan 2014 08:15 AM

By Sandy Fitzgerald

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People signing up for Medicaid through the Obamacare process may face gaps in coverage when their income fluctuates this year, which could prove costly for them, states, and insurers alike.

A process called "churning" is common for Medicaid recipients, reports The Washington Post. It occurs when people lose their eligibility through temporary income spikes that happen when they get seasonal jobs or get extra work hours.

But under Obamacare, people will now be able to pick up private insurance if they find themselves making more than 133 percent of the federal poverty level, which is the cutoff for Medicaid under the government's new expanded program, reports healthaffairs.org. At that point, they would likely be eligible for subsidized insurance under the federal exchange program.

If their incomes drop again, they can shift back to Medicaid. The process is disruptive for everybody involved, especially patients who may be forced to repeatedly change doctors, as well as providers and insurance companies.

According to Matthew Buettgens, a senior research analyst at the Urban Institute, about 9 million people will shift between Medicaid and the exchanges this year alone. He said the churning issue was not something that was given much thought while plans were being made to expand the Medicaid program and launch the new Obamacare system.

But states in charge of administering the Medicaid program are now beginning to consider ways to deal with the issues, says Matt Salo, executive director of the National Association of Medicaid Directors.

"You want people to have ­consistent insurance coverage, whether you’re dealing with someone who’s got mental health and substance abuse issues or a variety of undertreated chronic conditions," Salo told the Post. "If you get them into Medicaid at one point and get them stable and on a plan of care, you don’t want a transition into a different plan to set them back, and then have those people rebound back into Medicaid."

A few states have tried to help work around the churning issue. In Nevada, Medicaid managed-care companies must offer a comparable plan on the exchanges, and in Washington, there is a program aimed at getting insurance companies involved in the state exchange to offer Medicaid plans.

Texas Reps. Joe Barton, a Republican, and Gene Green, a Democrat, have introduced a bill in the House that guarantees 12 months of continuous eligibility to help contain the churning issue. Some two dozen states already require continued eligibility for children on Medicaid.

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