Overlapping coverage can help mitigate churn

Five states have already reported a 14 percent decline in Affordable Care Act marketplace enrollment, an early projection that raises concerns that the rest of the country will see increased churn throughout the year, according to Investor's Business Daily.

Since February, approximately a combined 100,000 people have dropped out of ACA plans in Colorado, Connecticut, Minnesota, Oklahoma and Washington. Colorado, in particular, saw steep declines after the state's consumer operated and oriented plans folded, leaving consumers to pay significantly more for catastrophic and bronze plans.

By extrapolating these statistics to the rest of the country, Investor's Business Daily estimated that even with half the attrition rate--7.5 percent--as many as one million beneficiaries have already dropped out of the ACA marketplace nationwide, and enrollment could sink as low as 10 million by year's end. For insurers, high customer churn can make it difficult to manage care.

However, a study published by the Association for Community Affiliated Plans notes that more than 40 percent of marketplace insurers are "overlap issuers" that offer ACA marketplace plans and Medicaid managed care coverage in the same state. Although overlap issuers are less prevalent at the county-level, dual offerings can help mitigate the impact of churn among low-income individuals who experience small income fluctuations that cause them to waver between Medicaid eligibility and marketplace plans.   

Last year, marketplace plans lost nearly 2 million enrollees between February and June because of heightened cost concerns and eligibility issues.

To learn more:
- read the Investor's Business Daily article
- here's the ACAP study

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