Continuous Eligibility Can Prevent Disruptions in Health Coverage for Children. Does your state have 12-month continuous eligibility?

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1 THE NUTS AND BOLTS FACT SHEET MEDICAID/CHIP Continuous Eligibility Can Prevent Disruptions in Health Coverage for Children States should adopt 12-month continuous eligibility policies. When children move between health coverage programs (or in and out of coverage) multiple times a year there are negative consequences both for the children and for their states. In order to reduce this problem, states should adopt or expand 12-month continuous eligibility policies, which smooth over fluctuations in children s eligibility and keep children covered for a full year. Beginning in January 2014, most children below 400 percent of the federal poverty level will be eligible for Medicaid, the Children s Health Insurance Program (CHIP), or the premium tax credits to help purchase health coverage through their states insurance marketplaces. Many of these children are predicted to experience mid-year changes in eligibility (caused by shifts in household income), which could cause them to move between health insurance programs one or more times a year. These movements, along with short-term spells of uninsurance, are called churning. Churning negatively affects children s health and is a costly administrative burden for states. One way states can proactively combat churning and help children maintain continuous coverage is to adopt or expand 12-month continuous eligibility policies. Continuous eligibility is a simple policy solution that allows children to maintain coverage in Medicaid or CHIP for a full year, regardless of fluctuations in family income. As states re-evaluate their eligibility systems and prepare for the full implementation of the Affordable Care Act, they should amend their state plans to adopt or expand continuous eligibility for their state s children in Medicaid and CHIP. Does your state have 12-month continuous eligibility? WA OR NV CA MT ND ID SD WY NE UT CO KS AZ NM OK TX MN WI IA IL MO AR MS LA NY MI PA OH IN WV VA KY NC TN SC AL GA ME NH VT MA RI CT NJ MD DE Full Continuous Eligibility: Your state provides continuous eligibility for children in Medicaid and CHIP. Some Continuous Eligibility: Urge your state to expand continuous eligibility policies to cover all eligible children. No Continuous Eligibility: Urge your state to amend their state plan and adopt 12-month continuous eligibility in Medicaid and CHIP. FL DC AK HI For the purposes of this map, some continuous eligibility refers to either continuous eligibility in CHIP but not Medicaid, or continuous eligibility only for very young children or infants. Full continuous eligibility refers to continuous eligibility in Medicaid and CHIP, or in Medicaid where no separate CHIP program exists. Data are current as of January Families USA, August

2 THE NUTS AND BOLTS Churning is a longstanding challenge that affects millions of children Millions of children are likely to experience churning due to changes in family income. Nearly one in three children in states without continuous eligibility is predicted to experience a change in household income that would affect his or her eligibility for health coverage under the Affordable Care Act within one year. 3 Millions of adults are likely to experience churning, which could affect their children s coverage. One in two adults with an income below 200 percent of poverty is predicted to experience a shift in eligibility from Medicaid to subsidized marketplace coverage, or the reverse, within one year. Of the adults surveyed, 43 percent had children under 19 years old. 4 Churning can be harmful for children s health and costly for states Transitions between sources of health coverage can result in coverage gaps. In 2008 and 2009, in Massachusetts, 17 percent of those transitioning into MassHealth (Massachusetts s Medicaid and CHIP program) from another public program experienced gaps in coverage. 5 Transitions between public and private programs are also associated with coverage gaps. 6 Coverage gaps and transitions undermine access to care. Children with gaps in coverage are less likely to have access to routine care than those with a full year of coverage. 7 Even for those who transition without gaps, changing coverage sometimes forces families to switch doctors, pay more out of pocket to see the providers that they trust, or discontinue some kinds of care for their children. 8 Without continuous health coverage, families find it hard to afford care. More than one in five children whose coverage is interrupted receive delayed care because of cost concerns; nearly one in seven do not receive the care that they need because their families cannot afford it; and nearly 10 percent do not receive prescription medications due to cost concerns. 9 Frequent transitions in and out of coverage are expensive for the state. In Massachusetts, nearly one-third of closed Medicaid and CHIP cases are reopened in less than 90 days, at a cost to the state of about $200 per enrollee per enrollment cycle. 10 Longer periods of coverage are less costly. In 2006, monthly Medicaid expenditures were about $469 a month when an adult was enrolled for 6 months, but went down to $333 a month when enrollment lasted a full year. Similar reductions were found in monthly costs for children Using Continuous Eligibility to Combat Churning

3 THE NUTS AND BOLTS Adopting 12-month continuous eligibility can reduce churning and its consequences Twelve-month continuous eligibility is a state option in Medicaid and CHIP and can be adopted through a state plan amendment. 12 It allows states to waive the federal requirement to immediately act on reported income changes that affect children s eligibility, so that children can keep coverage in Medicaid or CHIP for a full year rather than being forced to change coverage mid-year. Thirty-six states currently provide 12-month continuous eligibility policies for at least some infants or children in Medicaid and/or CHIP. 13 Children in states with continuous eligibility are 10 times less likely to experience shifts in their eligibility for coverage. In the first year of Affordable Care Act implementation, 30 percent of children in states without continuous eligibility are predicted to experience changes in family income that would affect their eligibility for health coverage programs. In states with continuous eligibility, only 3 percent of children are predicted to experience changes in program eligibility as a result of income fluctuations. 14 Twelve-month continuous eligibility policies contribute to higher retention rates. In the first decade of the CHIP, continuous eligibility, along with other consumerfriendly policies, was an important factor in CHIP s high retention rate. States with continuous eligibility policies were able to cover more children for longer. 15 States should adopt or expand 12-month continuous eligibility policies for children in Medicaid and CHIP States that do not yet protect all children with continuous eligibility should do one of the following: Adopt continuous eligibility for children. Fourteen states and the District of Columbia do not currently provide 12-month continuous eligibility for any children. 16 Offer continuous eligibility for more children. Some states do not provide continuous eligibility in all children s health insurance programs, or they limit continuous eligibility to children below a certain age. 17 States should expand continuous eligibility to cover all eligible children up to age 19. Continuous Eligibility for Adults Adults are also affected by churning. In order to adopt continuous eligibility for adults, states must obtain approval for an 1115 waiver or must amend an existing 1115 waiver (which allows states to make changes to their Medicaid program). For example, New York has received approval to adopt continuous eligibility for parents, pregnant women, and certain other adults in Medicaid. 18 CMS guidance released in May of 2013 allows for 1115 waivers for continuous eligibility for all adult populations, including newly eligible adults

4 How Continuous Eligibility Works Joy is a 6th grader enrolled in CHIP. In her state, the CHIP eligibility level is 250 percent of poverty ($38,775 for a family of two in 2013). Joy qualifies because her mom, Janelle, makes $32,000 a year. In order to help pay for her own insurance, Janelle receives a premium tax credit to use in her state s health insurance marketplace. When Janelle picks up a second job in May, her household income increases to $42,650 (about 275 percent of poverty). Janelle reports this change, and her premium tax credit amount is adjusted. When the second job ends in August, Janelle s income goes back down to $32,000 a year, and she again reports the change. What will happen to Joy s CHIP coverage when her mother s income increases temporarily? CHIP COVERAGE WITHOUT 12-month continuous eligibility CHIP COVERAGE WITH 12-month continuous eligibility COVERAGE JOY S COVERAGE DISRUPTED COVERAGE CONTINUOUS COVERAGE MAY JUN JUL AUG MAY JUN JUL AUG JAN FEB MAR APR INCOME INCREASES SEP OCT NOV DEC 250% 200% Income by percentage of poverty JAN FEB MAR APR INCOME INCREASES SEP OCT NOV DEC IN A STATE WITHOUT 12-MONTH CONTINUOUS ELIGIBILITY Joy would not be eligible for CHIP during the months that her mom Janelle has a second job. When Janelle s summer job begins, and she notifies the marketplace of her extra income, Joy s CHIP coverage would end. IN A STATE WITH 12-MONTH CONTINUOUS ELIGIBILITY Joy would be able to stay in CHIP and continue to receive consistent care. Her eligibility would be determined again only at the end of the coverage year. In order for her daughter to be insured, Janelle would have to enroll her daughter in a plan through the marketplace. This might cause a gap in Joy s coverage and/or might cause her to have to switch medical providers. Then, when Janelle s summer job ends, Joy would again become eligible for CHIP. 4 Using Continuous Eligibility to Combat Churning

5 Endnotes 1 Continuous eligibility has also been called continuous enrollment, minimum guaranteed eligibility, or continuous coverage. 12-month continuous eligibility should not, however, be confused with a 12-month certification period or 12-month renewal, both of which imply that families are not required to proactively re-establish eligibility more than every 12 months, but neither of which guarantee 12 months of coverage. 2 Kaiser Family Foundation, Has 12-Month Continuous Eligibility for Children Under Medicaid and Separate CHIP Programs, January 2013 (Washington: Kaiser Family Foundation, 2013), available online at jsp?cat=4&ind= Government Accountability Office, Children s Health Insurance: Opportunities Exist for Improved Access to Affordable Insurance, (Washington: GAO, June 2012), available at 4 Benjamin D. Sommers and Sara Rosenbaum, Issues in Health Reform: How Changes in Eligibility May Move Millions Back and Forth Between Medicaid and Insurance Exchanges, Health Affairs 30, no. 2 (2011): , available online at These numbers are based on the assumption that all states expand Medicaid, and this rate does not include churn caused by changes in job-based coverage. 5 Robert Seifert, Garrett Kirk, and Margaret Oakes, Enrollment and Disenrollment in MassHealth and Commonwealth Care (Boston: Massachusetts Medicaid Policy Institute, 2010), available online at enrollment-and-disenrollment-masshealth-and-commonwealth-care. 6 Pamela Farley Short, Deborah R. Graefe, and Cathy Schoen, Churn, Churn, Churn: How Instability of Health Insurance Shapes America s Uninsured Problem (New York: The Commonwealth Fund, 2002), available online at commonwealthfund.org/publications/issue-briefs/2003/nov/churn--churn--churn--how-instability-of-health- Insurance-Shapes-Americas-Uninsured-Problem.aspx. 7 Lynn M. Olson, Suk-fong S. Tang, and Paul W. Newacheck, Children in the United States with Discontinuous Health Insurance Coverage, New England Journal of Medicine 353 no. 38 (July 2005); , available online at org/doi/pdf/ /nejmsa P. 387, Medicaid and CHIP Payment and Access Commission (MACPAC), Report to the Congress on Medicaid and CHIP (Washington: MACPAC, March 2013), available online at 9 Lynn M. Olson, op. cit. 10 Robert Seifert, op. cit. 12 Leighton Ku, Patricia MacTaggert, Fouad Pervez, and Sara Rosenbaum, Improving Medicaid s Continuity of Coverage and Quality of Care (Washington: Association for Community Affiliated Plans, 2009), available online at: communityplans.net/portals/0/acap%20docs/improving%20medicaid%20final% pdf. 12 This option is codified in the Centers for Medicare and Medicaid Services and the Department of Health and Human Service s Notice of Proposed Rulemaking on Medicaid, Children s Health Insurance Programs, and Exchanges: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Process for Medicaid and Exchange Eligibility, Appeals and Other Provisions Related to Eligibility and Enrollment for Exchanges, Medicaid, and CHIP, and Medicaid Premiums and Cost-Sharing and is available online at 13 Kaiser Family Foundation, op. cit. 14 This data reflects continuous eligibility policies in place as of March The 3 percent figure represents children who have private coverage but become eligible for public coverage. Government Accountability Office, op. cit. 15 Margo Rosenbach, et al., National Evaluation of the State Children s Health Insurance Program: A Decade of Expanding Coverage and Improving Access (Cambridge, MA: Mathematica Policy Research Institute), available online at mathematica-mpr.com/publications/pdfs/schipdecade.pdf. 16 Kaiser Family Foundation, op. cit. 17 Kaiser Family Foundation, op. cit. 18 Martha Heberlein, Tricia Brooks, Joan Alker, Samantha Artiga, and Jessica Stephens, Getting into Gear for 2014: Findings from a 50-State Survey of Eligibility, Enrollment, Renewal, and Cost-Sharing Policies in Medicaid and CHIP, (Washington: Kaiser Commission on Medicaid and the Uninsured, 2013), available online at upload/8401.pdf. 19 Letter from Cindy Mann, Director, Centers for Medicare and Medicaid Services to State Health Officials and State Policy Directors, RE: Facilitating Medicaid and CHIP Enrollment and Renewal in 2014, May 17, 2013, available online at medicaid.gov/federal-policy-guidance/downloads/sho pdf.

6 Continuous Eligibility Can Prevent Disruptions in Health Coverage for Children This publication was written by: Sophia Kortchmar, Emerson Fellow, Families USA The following Families USA staff contributed to the preparationof this publication: Sarah Bagge, Health Policy Analyst Cheryl Fish-Parcham, Deputy Director, Health Policy Kathleen Stoll, Deputy Executive Director, Director, Health Policy Tara Bostock, Editor Carla Uriona, Director, Publications Nancy Magill, Senior Graphic Designer 1201 New York Avenue NW, Suite 1100 Washington, DC A complete list of Families USA publications is available at: August 2013, Families USA