The Effect of Medicaid Churning on Healthcare Utilization among Adults with Mental Health Disorders

Objectives:

Recent policy proposals have considered cutting billions in federal funding for Medicaid and restricting the program’s eligibility criteria, potentially leading to coverage loss for beneficiaries with mental health disorders. Little is known about the dynamic relationship between Medicaid coverage loss (or “churning”) and mental health care utilization. This analysis examined how outpatient healthcare and mental health service use changes when patients lose Medicaid coverage and become uninsured among a nationwide cohort of adults with mental health disorders, and how these changes progress over time while the individuals remain uninsured.

Methods:

Our sample included 4,822 persons (102,261 person-months) ages 18-64 with mental health disorders from the 2001-2014 Medical Expenditure Panel Survey. We examined patterns of healthcare service use pre-churning (while covered by Medicaid) and post-churning (while uninsured) among individuals who lost Medicaid coverage, and compared them with service use in a comparison group with continuous Medicaid enrollment. We identified the comparison group using a propensity score matching method. In our models, a simple “post” indicator was first used to estimate the average differences in healthcare service use post-churning, and a count variable measuring total months since churning—with linear and non-linear terms—was subsequently used to estimate changes over time. We estimated logit models to estimate changes in the likelihoods of any outpatient visit and any mental health related outpatient visit per-person-per-month. We also used two-part models to estimate total healthcare costs and out-of-pocket costs per-person-per-month.

Results:

Becoming uninsured after losing Medicaid coverage was associated with a 53% reduction (marginal effects [ME] = -15.09 percentage points, 95% CI: [-17.23, -12.95]) in the likelihood of receiving any outpatient services, and a 43% reduction (ME = -2.76 percentage points, 95% CI: [-4.22, -1.31]) in the likelihood of receiving any mental health related outpatient services in a month. Healthcare service use declined the most in the month immediately post-churning. Healthcare use trends declined further and flattened over the next half-year while the patients remained uninsured.

Moreover, the reductions in healthcare use post-churning was translated into a 53% reduction (ME = -$153.73; 95% CI: [-224.24, -83.23]) in total healthcare costs per-person-per-month. Further, we observed a 66% increase (ME = $4.85; 95% CI: [2.48, 7.22]) in patients’ out-of-pocket costs per-person-per-month. When examining how these trends changed over the six months following loss of Medicaid coverage, total costs continued to decline and out-of-pocket costs continued to rise, but these curves flattened over time.

Conclusions

Our analysis raises important considerations about the implications of Medicaid churning for low-income patients with mental health problems. Findings from this analysis suggest that loss of insurance coverage immediately after dis-enrolling from Medicaid disrupted the receipt of outpatient services among adult beneficiaries with mental health disorders, and this disruption persisted for an extended period of time post-churning. As states consider the future of their Medicaid programs in a dynamic policy landscape, it will be crucial to implement strategies to mitigate Medicaid churning and ensure adequate receipt of mental health related outpatient services for vulnerable populations.