Balancing Coverage Affordability and Continuity Under a Basic Health Program Option

Perspective:

This opinion piece in the New England Journal of Medicine discusses the possible impact of Basic Health Plans on both the affordability and continuity of care under the Affordable Care Act (ACA). The ACA expands coverage to an estimated 32 million currently uninsured people by expanding Medicaid to cover Americans with incomes up to 138% of the federal poverty level (approximately $30,843 for a family of four in 2011). The ACA would also institute other programs to make coverage available and more affordable to people outside of this group, through mechanisms such as: small-employer tax credits, creation of a new insurance exchange augmented by subsidies for low-income Americans, as well as the institution of a mandate that all individuals obtain health insurance. A number of states are considering adopting a Basic Health Program (BHP) that would administer coverage through the insurance exchange with subsidies for households whose incomes fall between 139% and 200% of the federal poverty level. The idea behind these BHPs is to use the infrastructure and reimbursement schedule used by the expanded Medicaid program in providing coverage to those just outside Medicare eligibility. One of the goals is to avoid transitions between Medicaid coverage and private coverage for people whose income fluctuates in and out of eligibility for the expanded Medicaid coverage.

The specific concern addressed in this article is the fear that fluctuations in income will move Americans in and out of Medicaid, leading to possible changes in coverage, which could lead to disruptions in continuity of care. The phenomenon of shifting in and out of coverage is referred to as ‘churning,’ and is viewed as a deleterious side effect of creating an expanded Medicaid. The authors use a dynamic income microsimulation model of the ACA, and longitudinal data on income and health insurance from the US Census Bureau’s Survey Of Income And Program Participation. They elegantly show that the creation of BHPs would be associated with an increase in ‘churning,’ or individuals fluctuating between various coverages. They conclude that BHP programs, even if integrated with Medicaid, could increase churning as they expand coverage and, therefore, may be potentially undesirable.

‘Churning,’ or individuals moving from one form of coverage to another, may be undesirable. But it seems an inevitable consequence of the clearly desirable goal of expanding coverage. To some extent, providing coverage to anyone who lacks insurance coverage will, by definition, lead to greater movement between types of coverage. The creation of a BHP would put Medicaid-eligible Americans, and those Americans with incomes just above Medicaid eligibility, under the same administrative and reimbursement structure. The potential for greater fairness, by providing more people with the same coverage, as well as the significant potential savings from the decreased marginal costs of a shared infrastructure, seem to outweigh any theoretical increase in churning—the unavoidable effect of individuals bettering their financial situation and, therefore, obtaining different coverage. Like the changes in coverage that come from finding a job, or finding a better job, any potential loss of continuity in care is, unless we adopt a single-payer system, an inconvenience with which we have already been dealing with far greater frequency than projected here. Expanding coverage to the uninsured is the essential element of health care reform, and addresses one of the single greatest embarrassments suffered by citizens of the largest and most advanced economy in the world. The importance of accomplishing this feat—in spite of the current economic and fiscal difficulties—should be the single overriding consideration.

Keywords: Bicyclo Compounds, Health Care Reform, Insurance Coverage, Continuity of Patient Care, Single-Payer System, Medicaid, Income, Patient Protection and Affordable Care Act, Eligibility Determination, Censuses, Medically Uninsured, Medicare, United States


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