Forecast? Churning…With a Storm on the Horizon
There is a gathering storm in Raleigh. Insurance companies, hospital officials, and lobbyists from across the medical community are converging on our state capital to influence the direction our state goes in implementing many of the key provisions in the Affordable Care Act (ACA).
For Care Ring and our brother and sister agencies serving lower income folks across Charlotte, negotiations over the role and function of North Carolina’s health insurance exchange will have a profound impact on our clients and the way they access health care.
The ACA expands health care coverage by providing states an option to expand Medicaid coverage (which North Carolina may or may not do – see my earlier blog post below on “The Paramount Public Policy Decision.”)
The ACA also allows those with slightly more income to receive subsidies to purchase private insurance through a new health exchange which will be operational by 2014.
But there is a third way to expand health care which has to date received much less attention in the popular press. The ACA gives states an option to create a “Basic Health Program” which allows states to offer public health insurance through the private state exchanges.
Basic Health Programs are designed primarily to address the issue of churning, which happens when individuals’ incomes and eligibility for public or private insurance fluctuates. Churning already happens when folks earn too much and move from Medicaid to private insurance in today’s health care system.
There are fears that churning – and the anxiety and disruption it brings to lower income families – will become even more prevalent with the ACA. The Robert Wood Johnson Foundation, in a November 2012 “Health Affairs” Health Policy Brief, projects that “…once coverage is expanded in 2014, within six months of enrollment, more than one-third of all low-income adults – about 28 million people – may experience enough of a change in income to churn between Medicaid and buying coverage through an exchange.”
States are eagerly anticipating further clarity from the federal Department of Health and Human Services (DHHS) on many key aspects of how a Basic Health Program will operate. Some states – including Washington, California, and Massachusetts – are moving full steam ahead with their own state-based Basic Health Program models.
There are potentially significant financial risks with a state Basic Health Model. One of many unresolved issues of this new health care option is whether providers will be paid at Medicaid rates or some other level.
For these and other reasons North Carolina may have been prudent to await greater guidance from DHHS on how this model can operate.
Regardless, the time is fast approaching when North Carolina must make critical decisions about how our exchange will operate, and whether we will extend insurance options to include a Basic Health Program. A Basic Health Model might be an excellent way to reduce unwanted churning and the disruptions this will cause for both providers and patients.