Back in May, Martha Heberlein wrote about 5 strategies that CMS is offering to help states face the task of enrolling large numbers of people on January 1, 2014.  One of these strategies, 12-month continuous eligibility for adults, is key to improving the continuity of Medicaid coverage, according to a paper published by the Association for Community Affiliated Plans last spring.

Every year millions of people enroll in Medicaid but lose their overage due to heavy paperwork requirements and small (usually short-term) increases in income. These interruptions cause people to be uninsured. As we all know, when people are uninsured they have a harder time affording necessary health care services and are more likely to delay care.

The authors developed a “continuity ratio” that measures the length of Medicaid enrollment during the year. The overall national average continuity ratio increased from 78% to 81% from FY 2006 to FY 2010-11. This means that an average person enrolled in Medicaid was covered for a little over three-quarters of the year and lacked Medicaid coverage for the remaining quarter.

Not only are people who have continuous coverage likely to be healthier, but also the authors find that improving continuity is more efficient and substantially lowered average monthly costs per enrollee. An adult enrolled in Medicaid for just one month in 2006 had an estimated average expenditure of $625, while an adult enrolled for 12 months had an average expenditure of $333 per month. Extending 12-month continuous eligibility to adults will be both cost-effective and improve the continuity of coverage for adults.