Welfare Leavers and Medicaid Dynamics: Five States in 1995. How Much Turnover and Churning Occurs in Medicaid Caseloads?

04/14/2000

A final study objective was to look at the extent to which turnover and churning in each state’s Medicaid caseload might be contributing to enrollment declines. As background for understanding these additional measures, it is useful to review the different ways Medicaid enrollment is counted. Most analyses of trends in Medicaid enrollment rely on year-to-year counts of the number of persons ever enrolled during the year, which states report to HCFA(now known as CMS) on Form 2082. These aggregate annual counts of the persons ever enrolled in Medicaid are a good measure of what is happening to overall enrollment, but they provide only limited information. Important to this discussion, annual counts do not reveal the extent to which persons remain enrolled from one year to the next. It is theoretically possible that individuals enrolled one year differ significantly from those enrolled the next year. There may be a tendency with Form 2082 data to think that most of the people enrolled from year to year are the same, but this may be erroneous.

Annual counts of the ever-enrolled, like those used in HCFA(now known as CMS)'s Form 2082, are derived by adding the number of persons enrolled at the start of the year to the number of new entries throughout the year. The level of exits or turnover during a given year do not affect this number. In addition, a person enrolled 1 month is counted the same as a person enrolled all 12 months. Those exiting the program during a year have an effect on the next year’s enrollment numbers, but only to the extent that fewer people are enrolled at the start of the next year.

As reported earlier, the SMRF data used for this study allowed us to look at monthly Medicaid enrollment counts for each state, similar to those used to track enrollment in state AFDC/TANF programs. Monthly counts are compiled as a net of persons entering, exiting, and continuing enrollment each month. We think they are a better barometer of enrollment, since they measure a shorter time period and immediately take exits into account. For analysis, it is helpful to have both sets of numbers.

For our analysis, we chose to measure turnover by comparing average monthly enrollment for each state during 1995 to the number of persons ever enrolled in Medicaid at any point during the year. We calculate a turnover rate for each state, based on the difference between the average monthly enrollment and the annual number ever enrolled. The closer a state’s average monthly enrollment is to the annual ever enrolled number, the lower the turnover rate. Among the study states, Florida experienced the greatest turnover in its Medicaid programs in 1995 (Table 10). In Florida, the average monthly enrollment was 68.3 percent of the annual ever-enrolled count. Thus, almost one-third of Florida’s Medicaid caseload turned over during the year. The other four states reported average monthly enrollment ranging from 73 to 78 percent of the annual count, for a turnover rate closer to 25 percent. As expected, in all the states, turnover was greater for adults than children.

  Alabama Arkansas California Florida Michigan New Jersey
TABLE 10
MONTHLY ENROLLMENT VERSUS PERSONS EVER ENROLLED
IN MEDICAID DURING 1995
 
Average Monthly            
AFDC cash 119,412 65,093 2,676,904 670,660 575,595 303,281
Poverty-related 145,758 53,565 87,986 259,496 65,411 69,664
Medically needy NA 10,476 695,562 19,053 76,900 2,894
Other 29,840 14,149 616,437 167,838 74,779 97,585
All persons 295,010 143,283 4,076,889 1,117,048 842,684 485,409
 
Ever Enrolled            
AFDC cash 158,335 94,971 3,106,304 910,522 692,297 384,861
Poverty-related 205,398 87,801 163,561 400,298 114,658 112,083
Medically needy NA 18,846 1,144,841 57,667 113,750 4,959
Other 39,991 22,067 887,585 266,375 95,500 136,060
All persons 403,724 223,685 5,302,291 1,634,862 1,084,205 637,963
 
Average Monthly as a Percent            
of Ever Enrolled            
AFDC cash 75.4 68.5 86.2 73.7 83.1 78.8
Poverty-related 71.0 61.0 53.8 64.8 57.0 62.2
Medically needy NA 55.6 60.8 33.0 67.6 58.4
Other 74.6 64.1 69.5 63.0 78.3 71.7
All persons 73.1 64.1 76.9 68.3 77.7 76.1
 
Children 77.3 65.5 78.5 71.4 79.3 78.6
Adults 61.1 51.1 73.5 60.6 74.4 70.6
 
Annual Turnover Rate            
AFDC cash 24.6 31.5 13.8 26.3 16.9 21.2
Poverty-related 29.0 39.0 46.2 35.2 43.0 37.8
Medically needy NA 44.4 39.2 67.0 32.4 41.6
Other 25.4 35.9 30.5 37.0 21.7 28.3
All persons 26.9 35.9 23.1 31.7 22.3 23.9
 
Children 22.7 34.5 21.5 28.6 20.7 21.4
Adults 38.9 48.9 26.5 39.4 25.6 29.4
Source:  State Medicaid Research Files
Principal Enrollment Group Single Coverage Gap Other Enrolled in December Other Not Enrolled in December  
TABLE 4 - California
Enrollment Pattern by Enrollment Group
AFDC Cash 107,640 12,621 7,443 127,704 afdc
Transitional AFDC 3,509 232 899 4,640  
EvM 10,975 829 2,906 14,710  
Poverty-Related Eligibles 11,184 5,844 6,466 23,494 pov
Medically Needy 82,837 34,940 37,986 155,763 mn
Other 25,728 9,191 9,428 44,347  
Disabled 1,611 384 213 2,208  
All Persons 243,484 64,041 65,341 372,866  
 
  65,905 other
 
  221,668  
Principal Enrollment Group Single Coverage Gap Other Enrolled in December Other Not Enrolled in December  
TABLE 4 - Florida
Enrollment Pattern by Enrollment Group -Number of Enrollees
 
AFDC Cash 59,692 14,319 13,173 87,184 afdc
Transitional AFDC 5,279 707 2,063 8,049  
Poverty-Related Eligibles 31,158 7,048 6,494 44,700 pov
Medically Needy 1,681 2,383 5,551 9,615 mn
Other 8,265 3,251 4,267 15,783  
Disabled 1,098 298 124 1,520  
    25,352 other
All Persons 107,173 28,006 31,672  

Turnover is appropriate when persons exiting the program are no longer eligible. Usually, turnover is thought of as inappropriate when eligible persons leave the program. Because state Medicaid data do not include information on why people disenroll from Medicaid, we have no way of knowing the extent of turnover that may be inappropriate. However, other researchers have shown that, although some children and adults leaving welfare become insured, a sizable proportion become uninsured.

Related to the turnover patterns, more than half the children in Alabama, California, Michigan, and New Jersey were enrolled throughout 1995 (Table 11). California, Michigan, and New Jersey also had close to half their adult Medicaid population enrolled throughout the year. Average lengths of enrollment for 1995 ranged from an average of 8.6 months for children in Florida, to 9.5 months for children in Michigan. The average length of enrollment during 1995 for adults ranged from 7.3 months in Alabama and Florida, to 8.9 months in Michigan. At the same time, it is important to remember that data on length of enrollment are restricted to 1995 and do not reflect the true average duration of Medicaid enrollment.8

Further detail is provided in Table 12, which compares average monthly entry rates (the proportion of persons currently enrolled in Medicaid who were not enrolled the previous month) and exit rates (the proportion of persons not currently enrolled in Medicaid who were enrolled the previous month) for the general population and for the poverty-related child group in 1995. In every state, the average monthly exit rate exceeded the entry rate, as we expected, given the overall decline in enrollment during the year. Also, as expected, given its higher turnover rates, Florida showed the highest rates of entry and exit for the general Medicaid population.

  Alabama Arkansas California Florida Michigan New Jersey
TABLE 11
PERCENT ENROLLEES WITH FULL YEAR ENROLLMENT AND
AVERAGE LENGTH OF ENROLLMENT DURING 1995
 
Percent Enrolled Throughout 1995            
Children 52.4 36.2 56.3 43.3 56.7 56.9
Adults 25.2 16.4 48.4 27.8 48.1 46.6
All Persons 45.4 31.2 53.8 39.1 53.4 53.7
 
Average Length of Enrollment (In Months)          
Children 9.3 8.2 9.4 8.6 9.5 9.4
Adults 7.3 6.3 8.8 7.3 8.9 8.5
All Persons 8.8 7.7 9.2 8.2 9.3 9.1
Source:  1995 State Medicaid Research File data.
  Alabama Arkansas California Florida Michigan New Jersey
TABLE 12
ENTRIES TO AND EXITS FROM MEDICAID DURING 1995
AS A PERCENT OF MONTHLY MEDICAID ENROLLMENT
     
Average monthly entries to and exits from Medicaid  
             
Entries 4.0 6.1 3.5 5.4 3.4 3.3
Exits -4.3 -6.7 -3.7 -5.8 -3.7 -3.4
Net difference -0.3 -0.6 -0.2 -0.4 -0.3 -0.1
             
Average monthly caseload 295,010 143,283 4,076,889 1,117,048 842,684 485,409
             
Average monthly entries to, exits from, and transfers in and out of child poverty-related coverage groups  
             
Entries 3.8 5.6 10.4 5.1 7.0 5.5
Exits -3.2 -5.0 -10.8 -6.2 -5.5 -4.5
Transfers in (from other groups) 0.6 NA 11.2 4.8 2.8 0.3
Transfers out (to other groups) -0.8 NA -9.2 -3.6 -2.3 -0.6
Net difference 0.4 0.6 1.8 0.2 2.0 0.7
             
Average monthly caseload 121,059 44,363 63,221 223,983 86,881 58,383
Source:  1995 State Medicaid Research File data.

The turnover rate among the child poverty-related group is shown in the lower panel of Table 12. We were particularly interested in the level of turnover among this group, since policymakers have expected its enrollment to grow as more children became eligible under phased-in coverage and as outreach efforts made more parents aware of the availability of this coverage. In addition to showing the rates of entrants and exits for this group, Table 12 shows the average percentage of children who transferred in and out of poverty-related coverage from other eligibility groups each month. We expected that many children would be exiting the poverty-related groups, since these children usually are from higher-income families (making their Medicaid eligibility more tenuous) and some children would always be aging out of poverty-related coverage. In addition, during 1995, the economy was beginning to improve in many states, which might have caused a reduction in the number of children eligible for poverty-related coverage.

The average monthly rate of entrants into the poverty-related child group was greater than the exit rate in all the study states but California and Florida. In addition, in three of the states, the proportion transferring in (from other Medicaid groups) exceeded the proportion transferring out. On net, as reported above, enrollment in the child poverty-related group grew in all the study states during 1995.

In some respects, the sheer number of children and parents who exited Medicaid (or turned over) during 1995 may be just as important a measure as the overall caseload declines across the study states. Across the five study states, monthly Medicaid enrollment dropped about 180,000 from January to December of 1995. However, nearly 1.5 million children and almost a million adults were enrolled at some point during 1995, but not in December (Table 13). In California alone, more

  Alabama Arkansas California Florida Michigan New Jersey Total
TABLE 13
NUMBER OF CHILDREN AND ADULTS IN STUDY STATES
WHO DISENROLLED DURING 1995
     
Children 69,390 56,209 774,176 339,827 159,632 95,585 1,494,819
Adults 45,482 29,700 489,971 198,000 108,854 61,822 933,829
Total 114,872 85,909 1,264,147 537,827 268,486 157,407 2,428,648
               
Source: State Medicaid Research Files
Principal Enrollment Group Single Coverage Gap Other Enrolled in December Other Not Enrolled in December  
TABLE 4 - California
Enrollment Pattern by Enrollment Group
     
AFDC Cash 107,640 12,621 7,443 127,704 afdc
Transitional AFDC 3,509 232 899 4,640  
EvM 10,975 829 2,906 14,710  
Poverty-Related Eligibles 11,184 5,844 6,466 23,494 pov
Medically Needy 82,837 34,940 37,986 155,763 mn
Other 25,728 9,191 9,428 44,347  
Disabled 1,611 384 213 2,208  
All Persons 243,484 64,041 65,341 372,866  
 
  65,905 other
 
  221,668  
Principal Enrollment Group Single Coverage Gap Other Enrolled in December Other Not Enrolled in December  
TABLE 4 - Florida
Enrollment Pattern by Enrollment Group -Number of Enrollees
 
AFDC Cash 59,692 14,319 13,173 87,184 afdc
Transitional AFDC 5,279 707 2,063 8,049  
Poverty-Related Eligibles 31,158 7,048 6,494 44,700 pov
Medically Needy 1,681 2,383 5,551 9,615 mn
Other 8,265 3,251 4,267 15,783  
Disabled 1,098 298 124 1,520  
    25,352 other
All Persons 107,173 28,006 31,672  

than 750,000 children left Medicaid during the year. As a point of comparison, California’s target for SCHIP enrollment in 1998 was 200,000 children. The state might be well served to focus on children exiting Medicaid each month as part of its SCHIP outreach effort. Nationwide, the SCHIP target is 2 million children.

As a final part of our analysis, we looked at the extent to which churning accounted for caseload turnover. Churning refers to persons whose enrollment in Medicaid is interrupted during the year-- they were on, then off, then back on, and so forth. Managed care organizations complain about the loss of revenue and administrative expense associated with churning. We excluded the medically needy group from our churning analysis, since there is often some interruption in enrollment as a result of the spend-down requirements.

Florida had the highest level of churning during 1995, with 10.2 percent of its overall caseload experiencing interruptions in coverage during the year (Table 14); New Jersey had the lowest level, involving only 3.9 percent of its caseload. In Alabama, the level of churning was about the same across eligibility groups. In the other states, however, the poverty-related group had a higher level of churning than either the AFDC or the residual “other” group. This was particularly true in California, where the churning rate for the poverty-related group was 14.4 percent, which far exceeded the rates for the AFDC and the other group. We are unclear about why this pattern would occur.