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With Health Care Reform, Income Swings May Mean Loss of Coverage

THURSDAY, Feb. 3 (HealthDay News) -- Under the new Affordable Care Act, the

health reform package signed into law by President Barack Obama last March,

millions of Americans whose income fluctuates during the year may lose health

insurance for periods of time as their eligibility for different programs

changes.

The authors of a new study appearing in the February issue of Health Affairs

estimated that as many as 28 million U.S. adults might " churn " in and out of

health insurance programs during the course of a year, sometimes losing coverage

more than once.

" It's a critical issue, " said Schoen, senior vice president of The

Commonwealth Fund, who was not involved with the study. " You could get a raise

or lose a week of work or gain a week, and move in and out of coverage. "

The problem is a version of the " churning " in and out of Medicaid that has

occurred for years, but with some improvements.

Under the traditional Medicaid system, people shifted between having coverage or

not having coverage depending on how much they were making.

Under the Affordable Care Act, Americans can move between two programs:

Medicaid, which will now be offered to all those whose income does not exceed

133 percent of the poverty line (about $13,800 per year), and premium subsidies

in state-run insurance exchanges, which will be available to people above that

dividing line up to 400 percent of the federal poverty level (about $41,500).

But when their eligibility fluctuates, they're likely to lose coverage at least

for a period of time.

" The good news with the Affordable Care Act is that, rather than falling off of

public coverage into nothing, which is what happens now, there's the potential

to have you picked up right away by the exchanges, " Schoen said. " But unless you

coordinate the plans that are being offered and the networks being offered, you

could still have a lack of continuity. "

" The [insurance exchanges] and Medicaid worlds don't exactly align so there may

be one-to-two month gaps without coverage, " added study co-author Dr.

D. Sommers, an assistant professor of health policy and economics at the Harvard

School of Public Health in Boston. " The administrative costs are also huge. And

even if there aren't gaps in coverage, Medicaid and the exchange plans could be

very different in terms of networks. One month you're seeing a particular

doctor, and the next month that person's not in your network. "

By taking a look at U.S. Census data from the last five years, Sommers and a

colleague estimated that in the first six months, 35 percent of families with

incomes below 200 percent of the poverty level ($20,760) will change eligibility

while half (28 million) would have crossed the threshold at least once during

the first year.

An estimated one-quarter of beneficiaries will likely have their coverage

disrupted by crossing the income dividing line at least twice in one year, and

39 percent will over the span of two years, the authors added.

Within four years, up to 38 percent will have their coverage disrupted four

times or more, they predicted.

And the authors expressed the concern that some people will just get sick of the

aggravation and paperwork, and opt to live without health insurance.

Because income changes are more common among younger, better educated adults,

the insurance pool could be deprived of the healthy members it needs to stay

financially solid.

There are several ways to remedy the problem, the authors stated, one being to

set up a guaranteed minimal enrollment period, say, for 12 months, so people

would only be reassessed once a year.

It would also help if there was overlap between the Medicaid and exchanges'

programs so people moving from one to the other wouldn't have to change doctors

or drug formularies, the authors added.

" It would be easier to fine-tune if it was a continuous program, " Schoen said,

and it would reduce costs.

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