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Medicaid provides insurance coverage to help tens of millions of low-income children, adults, elderly and individuals with disabilities access affordable health services. The Affordable Care Act (ACA) establishes an array of improvements in Medicaid, including allowing states to
expand coverage to millions of additional low-income adults beginning in 2014. Nonetheless, Medicaid can be like a leaky sieve: every year millions of people enroll, only to subsequently lose their coverage, even though they are still eligible. Even if they reapply later, they may
experience gaps without insurance coverage. The turnover of beneficiaries entering and exiting Medicaid is sometimes called “churning.”

On average, a typical Medicaid beneficiary is covered for four-fifths of the year and lacks Medicaid coverage for the remaining fifth of a year. Gaps are more common for non-elderly adults and less common for children, the elderly and those with disabilities. Interruptions can be
caused by many factors including: minor fluctuations in income, failure to submit periodic reports to update records about income or other factors, or being unable to renew enrollment on a timely basis.

Interruptions in Medicaid coverage frustrate both patients and their health care providers and can compromise the continuity and effectiveness of care. Research has shown that churning and insurance gaps lead to higher use of emergency rooms and psychiatric facilities, greater onset of health problems (e.g., asthma, diabetes problems) that could have been managed with ambulatory care and lower rates of cancer screening and early detection. Moreover, when parents have insurance gaps, it is more likely that their children will also have gaps.

If low-income patients are unable to afford to see physicians or fill their prescriptions for even a month or two, they can become sicker and eventually require emergency room or hospital inpatient care. Doctors and hospitals are frustrated and may lose money if they are not paid
because a patient’s Medicaid eligibility has lapsed for a brief period. There are cost-effective ways to provide more security to Medicaid beneficiaries and providers and to improve the effectiveness of the care they receive. New analyses of data from the Medical Expenditure Panel Survey demonstrate that when beneficiaries are enrolled in Medicaid for longer periods, the average monthly cost for their care declines

Leighton Ku and Erika Steinmetz, George Washington University. “Bridging the Gap: Continuity and Quality of Coverage in Medicaid.” September 2013.

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