In the U.S., there’s an alarming issue that’s often overlooked: churn in health insurance. This isn’t a physical ailment but a symptom of a disjointed health system. Churn happens when people frequently switch health plans, usually due to job changes or shifts in income. This instability creates a ripple effect that harms the overall health care landscape.
Every year, around 20% of Medicaid recipients experience churn, meaning they lose coverage only to requalify later. In the health insurance exchanges, roughly 26% of people change insurers or drop their coverage entirely. Even those with employer-sponsored insurance face churn, with annual rates estimated between 12% and 22%. For Medicare beneficiaries, about 18% change their Advantage plans yearly. On a broader scale, about 15-20% of insured Americans face coverage interruptions annually.
Churn leads to significant issues. It jacks up costs for marketing and re-enrollment and disrupts care as patients scramble to find new doctors within their new networks. But the most troubling aspect is that it discourages health insurers from investing in prevention and management of chronic conditions like diabetes and hypertension.
Investing in preventive care often saves money in the long run. For instance, vaccines like the measles, mumps, and rubella shot can save the health system between $13.50 and $26 for every dollar spent. Yet, insurers often opt for short-term savings, fearing that they won’t benefit from the long-term improvements if patients switch plans.
Research indicates that insurers typically allocate just 2% or less of premium dollars to preventive care, a stark contrast to the need. For example, studies show that 20-25% of women miss out on important screenings like mammograms, and less than 20% of adults over 50 receive full vaccination against shingles. Many people, including nearly 120 million Americans with high blood pressure, know little about their condition, with about 15% receiving no medical treatment at all.
This underinvestment results in more health issues and unnecessary deaths. For instance, cervical cancer, which can be nearly eliminated through vaccines and screenings, still affects thousands of women each year. On chronic conditions like diabetes, better management could add an average of three years to patients’ lives, significantly reducing the risk of serious complications.
To address these issues, we need to rethink our approach to health insurance. Establishing longer enrollment periods—perhaps five years—could incentivize insurers to invest more in preventive measures and chronic care management. Some Medicare Advantage CEOs are already advocating for a shift towards longer contracts to improve patient outcomes. This could lead to reduced administrative costs and healthier populations overall.
Sadly, recent legislative efforts threaten to exacerbate churn. Proposed cuts to Medicaid and marketplace subsidies could push millions of Americans out of coverage, increasing the churn rate and its harmful effects on health outcomes.
As health care continues to evolve in the U.S., addressing churn must become a priority to foster a system that values prevention and improves the health of all citizens.
Ezekiel J. Emanuel, M.D., Ph.D., is a professor at the University of Pennsylvania. John A. Graves, Ph.D., teaches health policy at Vanderbilt University.
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Health insurance,Medicaid,Medicare,Policy
