Researchers expect income changes to spur movement between Medicaid, insurance exchanges

Changes in income among those who will be eligible for subsidized health insurance under the Patient Protection and Affordable Care Act could lead to coverage disruption for about 28 million Americans within the first year as their eligibility shifts between Medicaid and the new state insurance exchanges, according to a study in the journal Health Affairs.

Starting in 2014, all non-elderly citizens whose family income does not exceed 133% of the federal poverty level will be eligible for Medicaid, while subsidized coverage through state health insurance exchanges will be offered to those not eligible for Medicaid whose incomes are up to 400% of the federal poverty level. Researchers predict that income fluctuations could lead to the so-called churning of adults and their families between Medicaid and the exchanges, often within months of their initial enrollment in the programs. In addition to gaps in coverage, this could also lead to changes in their health plans and provider networks.

“The income-sensitive approach to subsidizing health insurance creates issues for people near the eligibility cutoff,” Benjamin Sommers, co-author of the study and an assistant professor of health policy and economics and the Harvard School of Public Health, said in a news release about the findings. “Because there's no minimum enrollment period, eligibility and subsidy levels will change as income rises and falls—disrupting both coverage and care while potentially increasing administrative costs.”

The authors suggested strategies to minimize churning, such as establishing a minimum guaranteed eligibility period; creating support services to address the issue by ensuring that people have a way to report real-time income changes that could affect their eligibility; aligning coverage and benefits between Medicaid and the exchanges; and aligning exchanges and Medicaid plan markets and provider networks.