Fiscal Fitness: How States Cope - Simplified renewal process could save California millions lost to churning
Simplified renewal process could save California millions lost to churning
Medi-Cal, California’s Medicaid program, could save an estimated $100 million a year by reducing the number of eligible children who are disenrolled and then re-enrolled a short period later. A study funded by The California Endowment found that 18% or more than 600,000 of California’s Medi-Cal-eligible children were disenrolled at least once in the course of a three-year period and then regained coverage a short time later.
"Our findings indicate that children appear to be losing their coverage not because of eligibility, but for other reasons, such as having trouble navigating the complexities of renewal," said study author Gerry Fairbrother, a senior scientist at the New York Academy of Medicine and one of the nation’s leading experts in what is known as churning — when children are disenrolled only to be re-enrolled after a short period of time.
"The end result is a loss of coverage and continuity of care, which is critical to having a regular health care provider and to having access to preventive care visits."
Ms. Fairbrother said it costs California about $180 per child in administrative costs to re-enroll beneficiaries in Medi-Cal and other health plans. Those are funds that otherwise could be spent directly on providing health care coverage for uninsured children.
According to Ms. Fairbrother, efforts in California to simplify the Medi-Cal enrollment process and increase outreach for children have been successful, and by 2003, the program had enrolled nearly 3.4 million children.
Now, policy-makers are beginning to move beyond initial enrollment to ask questions about ways to keep eligible children stably insured and ways to increase system cost efficiency.
"Stability in Medi-Cal and in a health plan is important, and reducing churning is a key to achieving stability for eligible children," she wrote.
Gaps in coverage affect quality
Experts recognize that stability in a health plan is important for establishing a relationship with a physician, having adequate preventive and primary care, and appropriately treating any disease or chronic conditions.
Churning is important as a key reason for instability in coverage. Breaks in coverage, if they translate into gaps in health care, may adversely affect quality. Inefficiencies are introduced if the same children are enrolled and re-enrolled in Medi-Cal and may lead to unnecessary costs.
Ms. Fairbrother reported that while data from other states show problems retaining children in coverage over time, the picture has been more positive in California, with approximately half of Medi-Cal children in all age groups enrolled for three consecutive years. "This is a surprisingly high percentage of very stably insured children in Medi-Cal and indicates that Medi-Cal has the potential to affect quality of care," she pointed out.
While the percentage of stable enrollment is quite good, Ms. Fairbrother expressed concern that 18% of children in all age groups were disenrolled at least once in the course of three years and subsequently regained coverage. Most of those children had only one break in coverage in the three years, but small percentages exited and re-entered two or more times (11% had two breaks, and 1% had three or more breaks).
Most of the children disenrolled from Medi-Cal and subsequently re-enrolled did so within four months. In all ages, approximately 25% of the children regained Medi-Cal coverage after one month, and another 33% regained coverage in two to four months. Thus, some 60% of children in all ages who were disenrolled from Medi-Cal were re-enrolled within four months, with the median length of time without coverage being three months.
"The fact that breaks in coverage were relatively short suggests that children probably remain eligible and lost coverage for other reasons, such as having trouble navigating the complexities of renewal," Ms. Fairbrother said.
The study did not explore specific reasons for loss of coverage. She also said it is important to be aware that even though most children regained coverage in a short time, a little more than 25% of the children who were disenrolled and subsequently re-enrolled had breaks of more than seven months (25% for children ages 5 to 7 and 27% for other ages).
High levels of churning
According to Ms. Fairbrother, studies using national and other state data have shown disturbingly high levels of churning, which has significant implications for cost because administrative dollars to process applications diminish funds available for actual coverage. "In times of fiscal constraint, it is especially important to focus public funds on health care, rather than administration," she added.
Costs to enroll aren’t limited to the costs involving Medi-Cal, but also include, for many individuals, costs associated with enrolling in managed care plans such as the cost of the enrollment broker and costs to the health plan for new member processing.
Robert K. Ross, CEO for California Endowment, said the study "shows definitively that burdensome enrollment processes not only deprive California’s kids of badly needed health insurance, but also costs the state millions of dollars a year. "The report’s findings are particularly timely given the current debate on how California can best expand and afford providing health care for all children," he adds.
Simplifying enrollment
California Endowment said the study coincides with recent efforts among teachers, business leaders, parents, health care providers, faith leaders, and children’s advocates to encourage the governor and legislature to develop successful policy options for simplifying the enrollment process and insuring all California children over the next few years. Several bills have been introduced in the legislature to expand or strengthen children’s health coverage.
Several counties already are demonstrating great success in closing the children’s health care gap and improving the overall lives of children, the agency said.
For instance, a study conducted by Mathematica Policy Research found that Santa Clara County’s Healthy Kids program, which has insured nearly 30,000 uninsured children, has nearly doubled the number of children with a regular doctor and reduced by half the proportion of children who needed physician care at one time and did not get it.
[Download a copy of the churning study at www.calendow.org. Contact Ms. Fairbrother at (212) 822-7398 or e-mail [email protected].]
Medi-Cal, Californias Medicaid program, could save an estimated $100 million a year by reducing the number of eligible children who are disenrolled and then re-enrolled a short period later.
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