The problem is referred to by policy wonks as "churn." Because of the way Medicaid is administered by the states, millions of Americans enrolled in the program lose coverage temporarily every year because of often minor fluctuations in their income or even a change of address. Many are removed from the rolls simply because they can't take time off from work to go to a Medicaid office to re-verify their incomes every three months, which some states require.
It's called churn because most people who are "disenrolled" -- to use insurance industry jargon -- are eventually reinstated. Their eligibility for Medicaid never changed. They lost coverage solely because of paperwork requirements or a slight and fleeting bump in pay from working overtime during a given week.
This is unknown in the private insurance world because once you enroll in a health plan, you can stay enrolled in that plan for a year, so long as you keep paying the premiums on time. It doesn't matter if you move from one street to another or work an extra shift to make a few extra bucks.
But staying covered for a full year under Medicaid is not a given, and the consequences of this churn are costly, and not just for those most directly affected. The situation is costly to taxpayers, too, because of the unnecessary administrative expense. It costs hundreds of dollars per enrollee to verify income multiple times a year and to process all the paperwork involved in reinstating a beneficiary. When you consider that 58 million of Americans are currently enrolled in Medicaid -- a number that will grow substantially next year when many states expand coverage under the Affordable Care Act -- billions of taxpayers' dollars are being wasted because of churn.
Those who fare the worst, though, are eligible beneficiaries who get dumped into the ranks of the uninsured.
"Even short gaps in coverage can lead to delay or avoidance of needed care," says Leighton Ku, director of the Center for Health Policy Research at George Washington University's School of Public Health and Human Services, who along with colleague Erika Steinmetz studied the effects of churn. They released their findings in a report last month.
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