With thoughtful reforms, the State of Minnesota can better target our resources without decreasing eligible families’ access to vital services. Dorothy Rosenbaum at the Center for Budget and Policy Priorities cites several states’ successes doing so in Lessons Churned: Measuring the Impact of Churn in Health and Human Services Programs on Participants and State and Local Agencies. Minnesota should apply these valuable lessons to a new data-matching initiative passed in the Health and Human Services budget.
In the wonk’s dictionary, “churn” describes participants dropping in and out of public supports like Medical Assistance within short periods of time. Oftentimes, this happens even when nothing occurred in a person’s life that would change their eligibility. Examples of such “procedural churn” include when the state fails to provide clear instructions on how to re-apply, or when a person does not respond with requested information before a renewal deadline.
Regardless of whether this occurs due to an error by the state or a family, eligible people lose their health care or other services that are important for them to meet their most basic needs. Meanwhile, the state pays for the unnecessary work of closing, then re-opening, these cases.
Depending how it’s implemented, a proposal in the Health and Human Services budget could increase the potential for churn. While it differs in important ways from the eligibility audit in the House’s Health and Human Services omnibus bill, it could still echo the bad precedent from Illinois upon which the House based its version. Illinois lawmakers hired a third-party vendor to assist the state’s effort to verify people’s eligibility for public health insurance. Recent reports show that 84 percent of cancelled health insurance cases in 2014 occurred simply because participants did not respond to requests for personal information from this unfamiliar vendor, and that 89 percent of these non-respondents were “likely eligible.”
This was textbook churn, and it could happen in Minnesota if the state isn’t careful. Fortunately, the Health and Human Services omnibus bill instructs the Department of Human Services (DHS) to perform its own data-matching rather than engaging a third-party vendor. That’s especially good because in Illinois the vendor didn’t bring significant new information to the table. The legislation also provides Minnesotans 30 days to respond to the state’s request for information, as compared to a limit of 10 business days in Illinois. However, those extra days won’t make a difference if an eligible person simply misses or misunderstands the request. DHS must take care to ensure that the effort doesn’t cause eligible Minnesotans to lose their health care, as happened in Illinois.
Rosenbaum’s paper supplies many potential strategies for churn reduction that can benefit the budget without harming the people. Successful states typically begin with data collection and analysis. One state, Louisiana, found that in 22 percent of their health insurance renewal cases people lost their coverage for procedural reasons. After identifying the problem, Louisiana was able to reduce this rate to 1 percent in a matter of years by improving the renewal process. For example, the state increased telephone contact with participants, and used existing data to renew eligibility when possible. Because of these reforms, fewer eligible families lost their health care and the state wasted fewer resources on unnecessary cancellations and re-enrollments.
Cycling in and out of health care coverage is ultimately harmful to families and adds unnecessary costs to state agencies. If not implemented carefully, the Health and Human Services re-verification initiative could simply exacerbate this problem. Instead, Minnesota should use it as an opportunity to more efficiently serve families by addressing procedural churn.