The Obama Administration may be cheering the landmark enrollment number of 7.1 million, but insurers selling public exchange plans and operating Medicaid organizations should be prepared for a fair amount of turnover.
Similar to the pre-Affordable Care Act individual market, individual health plans in public exchanges could see turnover as high as 40 percent in a given year if California, the largest state, is any indication, say researchers at the U.C. Berkeley Labor Center.
In a study examining the longitudinal demographics of California's pre-65 population and those eligible for insurance subsidies and Medicaid, a research team led by U.C. Berkeley data analyst Miranda Dietz found a that a few economic trends are likely to drive a sort of "churning" in Covered California's membership pools -- and probably in other exchange as well.
By Dietz and her colleagues' estimates, Covered California health plans will retain only a bit more than half -- 53 percent to 58 percent -- of its initial membership pool, in an economy with an ever more fluid labor force and fluctuating incomes.
Over a one year period, between 20 to 21 percent of those new health plan enrollees could see their incomes fall below below 138 percent of the federal poverty level and end up eligible for Medicaid.
Almost as many, between 18 and 19 percent, are likely to find better-paying jobs and end up dropping their exchange plans as they become eligible for employer-sponsored insurance.
Meanwhile, among the Medicaid, or Medi-Cal, population, the turnover may not be as high, but could still be substantial, with around 16 percent estimated to see income increases that make them eligible for subsidized private coverage and about 9 percent likely to land work that comes with insurance.
Medicaid may be the more the stable of the two membership pools, with close to 75 percent of enrollees likely to remain eligible over the course of a year. Redeterminations will now happen every 12 months under new ACA program rules.
In exchange plans, Dietz and her colleagues argue, the turnover of about 55 percent is expected to be on a par with the pre-ACA market: between 50 percent and 60 percent.
There are also some consumers who are going to end up with periods of uninsurance, Dietz and her colleagues found.
In the course of a year, anywhere between 2 percent and 8 percent of subsidy-eligible Californians could experience a "triggering event," like losing employer-sponsored insurance, getting married, having a child, going through a divorce, experiencing disability or moving into a new service area.
Those eligibility changes, though, "do not guarantee enrollment," Dietz and her colleagues wrote.
"Making sure that people successfully transition from one type of insurance to another will depend not only on the ease of enrollment, but also the extent to which Covered California and Medi-Cal take advantage of existing institutional points of connection to people undergoing these life transitions, e.g., COBRA notices or government services like unemployment, CalFresh (food stamps), or the Department of Motor Vehicles," they argued.