For millions of low-income Americans, the road to health care reform in 2014 could prove to be a jagged line through which they bounce between public exchanges and Medicaid as their income fluctuates over the year.

While the effect on care consistency, quality and cost generates concern for those forced to switch health plans or doctors, it may pale in comparison to the “churning” phenomenon long seen in Medicaid when program eligibility is lost and then regained.

“The challenge historically has been that people have churned between coverage and nothing, and that’s a big problem,” explains Matt Salo, executive director of the National Association of Medicaid Directors. “Now while churn is still a problem, it’s a much better problem to have as people are moving between Medicaid coverage and exchange coverage.”

He acknowledges key differences in terms of cost sharing and benefits, as well as movement among different provider networks, but points to a number of solutions aimed at encouraging a segmented industry to straddle these lines.

Examples include Nevada’s requirement that Medicaid managed care companies offer a comparable HIX plan, Washington’s program to create seamless plans with identical networks and Delaware’s plan to ease any HIX transition from Medicaid by covering approved medical treatment and medications.

There’s also bipartisan legislation, sponsored by two Texas congressmen, U.S. Rep. Gene Green, a Democrat, and U.S. Rep. Joe Barton, a Republican, to help stop churning. Their plan would require states to guarantee a year of continuous eligibility to people on Medicaid — a requirement in about two dozen states for children on Medicaid and the Children’s Health Insurance Program.

“Do Medicaid-only plans want to start offering coverage in the exchange and do predominantly private-sector plans want to start playing in Medicaid?” Salo asks. “If you can make that happen, you drastically minimize churn if you can move an individual from a company’s Medicaid product into that company’s exchange product, or vice versa.

“Plans should want to do this, and some already are,” he continues. “Compelling them to do so is technically a tool that states can utilize, but it’s a pretty drastic one, and most states won’t pursue that. Other states are looking at less invasive policies, such as requiring that any plan cover a previous plan’s therapeutic or pharmaceutical plans of care for some period of time after the churn, even if those aren’t in the plan’s benefit package.”

An estimated nine million people are expected to shift between the exchanges and Medicaid during 2014, Matthew Buettgens, a senior research analyst at the Urban Institute, noted in a recent Kaiser Health News story produced in association with The Washington Post. While nearly 30 million Medicaid beneficiaries are enrolled in private managed care plans, Medicaid expansion plans under the Affordable Care Act are expected to make millions more eligible for such coverage.

The report suggested that convincing these health plans to sign up for both markets to help avoid any churning remains a challenge, with just 16 of 60 Association for Community Affiliated Plans members having joined the exchanges. One such explanation is differences between Medicaid contracts and state health insurance rules for commercial plans.

Bruce Shutan is a Los Angeles freelance writer.

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