How Build Back Better Act Impacts Medicaid Enrollment Churn Rate

If the continuous enrollment policy from the coronavirus pandemic becomes a thing of the past, policymakers will need to find new mechanisms to control the Medicaid enrollment churn rate, a Kaiser Family Foundation (KFF) report suggested.

The researchers analyzed the Medicaid enrollment churn rate in 2018 and compared it to the churn rates in 2017 and 2019. They pulled data from the 2018 Demographic Eligibility (DE) Base in the Transformed Medicaid Statistical Information System (T-MSIS) Analytic Files (TAF) Research Identifiable Files (RIF).

One out of every ten Medicaid beneficiaries who received full benefits through the Medicaid program experienced a coverage gap during 2018. Slightly more than four percent were disenrolled and re-enrolled in a three-month time period. Almost seven percent were disenrolled and re-enrolled over the course of six months.

Certain beneficiary populations experienced higher churn rates. For example, seniors and beneficiaries with disabilities tended to have more stable Medicaid coverage. 

In contrast, slightly more than 12 percent of beneficiaries without disabilities who were non-elderly adults lost their Medicaid coverage for a period of time. Similarly, a little over 11 percent of children without disabilities who received full Medicaid benefits were disenrolled and re-enrolled in Medicaid during 2018.

Whether or not a state has adopted Medicaid expansion does not appear to have much direct influence on Medicaid enrollment churn rates. Among adults in states that had adopted Medicaid expansion, the Medicaid churn rate in 2018 was 11.8 percent. Other adults who were not in Medicaid expansion states experienced a 12.1 percent churn rate.

Some states had a Medicaid enrollment churn rate as low as five percent while other states had up to 15 percent or more of their beneficiaries disenrolling and re-enrolling during a single year.

The Build Back Better Act is a bill that is on the table in Congress which would implement strategies to control the Medicaid enrollment churn rate longterm.

The researchers predicted that these disenrollment patterns will resume when the coronavirus-era continuous enrollment requirement comes to an end—which could occur on April 1, 2022 if the Build Back Better Act passes.

However, the law does instate disenrollment protocols to help lower churn rates. Beneficiaries would only be subject to disenrollment if they have already been covered under Medicaid for a year or more and if they have been unsuccessfully contacted through a minimum of two modalities.

The bill also requires certain changes in data reporting from states related to disenrollment. States would have to submit data on call centers, eligibility renewals, redeterminations, and coverage terminations. States would also have to provide a year of continuous coverage for children and postpartum care.

Some states have already implemented measures to decrease churn, such as taking income changes into account, projecting annual income at renewal or when there is a change in circumstances between renewals, or streamlining communication processes.

The Build Back Better Act’s implications are far-reaching. Not only would it impact Medicaid enrollment processes, but it may also influence Medicare Part D drug spending, according to a separate KFF report. The bill introduces five ways to lower drug spending including adjusting the noninterference clause and repealing the drug rebate rule.

Experts have argued that the bill would provide a temporary solution to closing the Medicaid coverage gap, but not a permanent one, according to another KFF report. Individuals in non-expansion states would have access to marketplace subsidies from January 1, 2022 to December 31, 2025 but this still leaves the question of what would happen to these individuals’ coverage after 2025.

Instead, some experts have pushed for broader acceptance of Medicaid expansion in order to protect beneficiaries’ coverage.

The Medicaid enrollment churn rate report from KFF is just one piece of an ongoing, industry-wide conversation about whether to solidify coronavirus policies and, if so, which ones.