Churn less severe than expected for low-income ACA enrollees, but still problematic

Harvard College

Customer churn among Affordable Care Act enrollees may not be as severe as previously thought--at least for low-income individuals.

Benjamin Sommers

An analysis published in Health Affairs and led by Benjamin D. Sommers, a health policy and economics professor at the Harvard T.H. Chan School of Public Health, explored the frequency of customer churn among low-income ACA enrollees in Kentucky, Arkansas and Texas. Sommers and his team found that only about 25 percent of survey respondents changed health plans at least once in 2015, which the study notes is a lower rate than previous estimates.

Among a wider population of ACA enrollees, only one-third picked the same plan in 2016 open enrollment as they did in 2015, suggesting a churn rate of 66 percent, according to a previous analysis from Avalere Health, a healthcare consulting firm.

Employment-related insurance changes, changes in income that affect eligibility for Medicaid or ACA subsidies, and the price of previous plans were the three biggest factors contributing to churn among the population studied by Sommers and his team.

The researchers selected Kentucky, Arkansas and Texas to ascertain if the states’ different approaches to Medicaid expansion had an impact on churn, but did not find a significant difference among the states.

Still, 56 percent of survey participants who switched plans experienced a gap in coverage, according to the study. Further, 45 percent of those who experienced coverage gaps also had disruptions in medication adherence, Sommers' team found. 

Creating a Basic Health Program to cover people whose incomes are below 200 percent of the poverty is one strategy to decrease churn, according to the researchers. Policymakers could also implement multimarket plans that allow members to keep the same provider network and benefit design when transitioning between Medicaid coverage and plans acquired via the ACA marketplaces, the researchers add. 

Plan-switching is problematic for insurers, as it makes it more difficult for to invest in members’ long-term health prospects, FierceHealthPayer has reported.

Earlier this year, the Obama administration said it was taking steps to ensure its own processes make it simpler for consumers to stay enrolled in plans. More recently, health officials unveiled a new strategy designed to provide an alternate health plan suggestion for consumers whose plans have been discontinued.