Churning Under the ACA and State Policy Options for Mitigation

Many state and federal officials implementing the ACA are concerned about “churning,” the involuntary movement of consumers from one health plan or system of coverage to another. Churning makes programs more complicated and costly to administer and interrupts continuity of coverage and care.

While state policy-makers cannot end such transitions, they can reduce their prevalence through a multipart strategy that addresses each component of churn. They can also limit the resulting damage by providing consumer assistance to help people navigate through health coverage transitions, by implementing policies that maintain continuity of care when consumers are forced to change health plans, and by taking steps to prevent eligibility transitions from creating coverage gaps and losses.

Earlier estimates of churning examined the effects of income fluctuations. This paper is the first that also takes into account affordable offers of employer-sponsored insurance (ESI), which disqualify consumers from all insurance affordability programs except Medicaid and the Children’s Health Insurance Program (CHIP).

Key Findings

  • An estimated 29.4 million people of the 96 million who will qualify either for Medicaid or exchange subsidies will change eligibility from one year to the next.

  • More people will gain or lose subsidy eligibility from year to year than will retain such eligibility.

  • To lessen churning's negative effects--including increased administrative costs, interrupted continuity of care, and coverage gaps--states could implement comprehensive initiatives that achieve two distinct objectives: lessening churning's extent and limiting churning's harm.