Association for Public Policy Analysis & Management

Background: In the United States, patients frequently change health insurance (“churn”), which can lead to under-investment in health care with long-term benefits, such as preventive care. Although coverage of preventive care without patient cost-sharing was mandated for all health insurance plans under the Affordable Care Act, a new rule from February 2018 enables more health plans to be exempt from this requirement.

Hypotheses: Because patients’ health plan options and Medicaid eligibility may change frequently, we hypothesized that churn across health insurance plans could remain substantial even as coverage expands under the Affordable Care Act. As such, patient groups who benefit most from preventive care may remain at high risk for churn, creating a low incentive to cover preventive care under the new policy.

Data and methods: We use data on health insurance enrollment from the Medical Expenditure Panel Survey from 2006-2015, to calculate two quantities of interest: (a) patients’ potential life-years gained from preventive care based on previous literature (Maciosek et al. 2010), and (b) patients’ month rates of churn across health insurance plans over their a two-year observation period. We use Cox proportional hazard models to model churn and its determinants. We use interaction terms in the model to test for changes in churn after full implementation of the Affordable Care Act in 2014 and adjust for secular trends. We additionally model churn as a function of characteristics that determine benefit from preventive care according to the literature, such as chronic conditions status, age, sex, and tobacco use.

Results: Smokers had the highest potential gains from preventive care, but also churned out of Medicaid or private health insurance at a 70% higher rate than non-smokers. Younger adults also churned out of health coverage at elevated rates. Although rates of churn out of Medicaid decreased after full implementation of the Affordable Care Act, rates of churn out of private insurance remained similar or increased.

Discussion: Patients with large gains to preventive care frequently churn across health insurance, decreasing health insurance plans’ incentive to cover preventive care for these patients. New rules that relax preventive care coverage mandates are likely to result in under-provision of cost-effective preventive health care services.