Addressing "churn" in state health insurance programs

Churn (recipient turnover in health insurance programs) has long plagued state Medicaid/CHIP programs and state initiated insurance programs. Churn increases administrative costs and often leaves people without coverage. Moreover, health exchanges and expanded Medicaid coverage will intensify the problem, where changes in reported income will result in changes in coverage. Policies addressing churn rates show mixed results. This study identified policies that could potentially reduce churn for federally mandated state insurance exchanges. Experiences from states suggest that a commitment to maximizing enrollment by streamlining enrollment and reenrollment processes reduces churn.

Methods: The study was conducted through 1) a comprehensive literature review—published and unpublished papers, reports, etc., 2) interviews with state officials and 3) an analysis of enrollment data from Vermont's Catamount Health insurance program.

Results: Several policies to control churn rates were identified from the research; two in particular were identified as most important for states' in reducing churn and the negative effects associated with churning in health insurance exchanges. They are: 1. Improve the process for recertifying enrollees: States need to update their systems for renewing enrollees; most recertification processes are characterized as being cumbersome and confusing for many enrollees, as well as too reliant on paper forms. Upgrading the system by adopting improved renewal processes will be an important policy for states' to consider and may lower churn rates among those who drop off coverage due to issues related to the renewal process. For example such processes include: o Ex parte renewal o Off-cycle renewal o Recertifying enrollees over the telephone or online o Passive renewal o Proactive follow-up States that stood out as having implemented successful strategies aimed at streamlining reenrollment in programs include Louisiana and Wisconsin, which have in turn minimized churn rates and maximized enrollment among eligible children for their respective Medicaid/CHIP programs. These policies should be expanded to maximize enrollment among eligible adults. 2. Standardizing the benefit packages between plans offered on the Exchange and with Medicaid: With the introduction of publicly-subsidized plans sold on the Exchanges – whose subsidies are sensitive to income - churning between public programs will undoubtedly increase, especially as Medicaid eligibility is also expanded. Unless efforts are made to standardize, as much as possible, the benefits that enrollees have will change each time their income changes.