The Medicaid Expansion: A One-Step Plan to Improve Coverage and Care

Margaret Murray and Kathryn Kuhmerker, Association for Community Affiliated Plans

In 2014, the Affordable Care Act will expand Medicaid eligibility and bring affordable health coverage to up to 16 million people who don’t have it today. For the first time, thanks to the ACA, all Americans—at least those who live in states that  opt into Medicaid expansion—will have a source of guaranteed, affordable health coverage regardless of their income or health status. This is the greatest expansion of coverage to those who need it most since the enactment of Medicare and Medicaid nearly 50 years ago.


But this continuum of coverage has rough edges that need smoothing. Low-income adults – unlike those covered by Medicare or commercial insurance — frequently move between different sources of coverage. Research shows that once health reform is fully implemented, up to half of the 28 million adults with incomes under 200 percent of the poverty line will experience income changes that require them to change coverage between Medicaid and health insurance Exchanges in a given year. Up to 7 million of those individuals will shift between the programs twice or more within that first year. This can have serious repercussions for their financial and health status.


Health reform’s success will depend on the extent to which those newly eligible for coverage actually find that they have the health coverage they were promised, at the time they need it, at a price they can afford.


Here’s one way to achieve that goal: guarantee twelve months of continuous eligibility to all who qualify for Medicaid, regardless of changes in income. At the end of twelve months, eligibility is re-evaluated. This is similar to how commercial coverage and low-income subsidies for Medicare Part D work.


Continuous eligibility would go a long ways towards combating “churn,” a term which refers to the removal of people from the Medicaid rolls for administrative reasons unrelated to their eligibility, or for their movement between the Medicaid and Exchange program owing to minor changes in income.


The road between Medicaid and the Exchange will be littered with red tape and speed bumps. First, since not all Medicaid providers will participate in plans in the Exchange, and vice versa, transitions will inevitably lead to disruptions in provider-patient relationships—and disruptions in care for those with ongoing health needs. This will result in higher administrative overhead to process these transitions, and higher medical costs for those whose care is interrupted. Continuous eligibility would help preserve relationships between patients and physicians and maintain continuity of care.


Churn also stymies the efforts of health plans serving Medicaid populations to provide consistent, coordinated care and to measure the quality of care delivered by providers in their network. Nearly all health care quality measurement requires that people be covered by an entity for 12 months. The average adult Medicaid beneficiary is in the program for a far shorter period of time – about 8 ½ months of the year, according to new data from George Washington University. Continuous eligibility will help all of us understand what kind of health care the Medicaid program is delivering in return for our health care dollar and guide improvement efforts.


Continuous eligibility, coupled with mandatory quality reporting requirements for fee-for-service, in addition to the ones already required in managed care, could be leveraged by policymakers and others in their efforts to be better stewards of the significant public investment that Medicaid represents. In the traditional Medicaid fee-for-service system today, systematic measurement doesn’t exist.


The Medicaid and CHIP Payment and Access Commission (MACPAC) recognizes churn as an issue. At a meeting in late 2012, the Commission noted that it is considering continuous eligibility as an option to address churn, and it is expected to address churn in a report set to come out in March. Others, including the American Hospital Association, have noted that undue churning can lead to waste and degrade the quality of care.


Congress passed a law allowing states the option of providing continuous eligibility to children, But only 23 states have done so for Medicaid, and 28 states for CHIP programs – leaving more than 30 million adults on Medicaid and 19million children unprotected by current law.


That is why ACAP would like to see 12-month continuous Medicaid and CHIP eligibility for children and an expansion of continuous eligibility to Medicaid-enrolled parents, low-income adults, persons with disabilities, and the elderly. (Representative Gene Green (D-Texas) has introduced H.R. 172 and H.R. 173, which would provide 12-month continuous eligibility for children in the Medicaid and CHIP programs.) Extending 12-month continuous eligibility to children and adults is a common sense approach that not only helps reduce barriers to coverage, it helps improve government efficiency. Those who benefit from Medicaid are no less deserving than the rest of us in the knowledge that their health coverage will be there when they need it.