An insurance coverage shift because of a change in income is known as “churning,” where individuals go from private coverage to Medicaid or vice versa. Sometimes these same individuals go through a spell of being uninsured due to the change. According to a Health Affairs article from April, more than 28 million low-income adults could experience a change in income within six months of enrollment in an ACA exchange plan to churn between a private plan and Medicaid or move between public and private coverage and being uninsured. Often times, churning means losing access to providers, having benefits changed, or paying more or less in premiums and cost sharing.
Some states are now seeking new ways to mitigate churn and ensure continuity of care. Strategies include allowing Medicaid beneficiaries to stay in the program for up to 12 months even if their income grows, or establishing a state Basic Health Program where a state sets up a health plan for people whose income is above the Medicaid threshold but still below 200% of the poverty level.
However, sometimes churning from Medicaid to exchange plans can create payment problems for providers. Many exchange plans have high deductibles and cost-sharing and since Medicaid patients are used to having limited-cost sharing, they sometimes don’t understand their financial responsibilities under a private plan. Many states are now planning strategies to address churn.
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