Large portion of people who leave their insurance plan re-enroll at a later date, study finds

A new study published in JAMA explores churn in the health insurance coverage in a large private health insurer to gain a better understanding of how people change insurance plans.

Access to preventive care and continuity of health care services are crucial to helping people live healthy lives. People often switch health insurance providers due to job changes, employers switching plans or individual consumers picking different policies over time. This type of churn can make preventive care more challenging and create incentives for insurance companies to reduce preventive care benefits if their customers may leave at any time. However, not much is known about how people leave and re-enroll in commercial insurance plans over the long haul.

In this study, Benjamin Ukert, PhD, assistant professor in the Department of Health Policy & Management at the Texas A&M University School of Public Health, and colleagues from the University of Pennsylvania and other organizations, examine enrollment data from the health insurance company Anthem between 2006 and 2018. Anthem offers individual and group commercial plans in 14 states and Medicare and Medicaid plans in some states.

The researchers took a random sample of 5 percent of the enrolled commercial plan members—slightly more than 3 million people—during the study period. They compared turnover in Anthem’s employer-provided group insurance plans and individual plans to see how long people stayed with a plan before leaving and to what extent people re-enrolled in one of the company’s plans (including Medicare Advantage and Medicaid Managed Care plans) at a later date.

Prior research has found that 15 to 20 percent of people using various health insurance plans change plans each year. This can include people switching to a Medicare Advantage plan, people losing access to Medicaid-associated plans due to income changes, customers buying different individual insurance plans on the Health Insurance Marketplace, employers changing group coverage options or people moving to different jobs.

Their analysis found that each member was enrolled in a plan for approximately 48 months during the study period. However, there was notable variation in enrollment time and around one-quarter of members remained with the insurer for five years before leaving. Over the same period, slightly more than one-third of the people in the study re-enrolled in some Anthem plan within five years of leaving.

The researchers highlight the importance of this finding. People re-enrolling at a later date means that the insurer can benefit from the prior investments they made in preventive care. Like all businesses, insurers compare costs and benefits. At first glance, high turnover in the insurance market would imply that the benefits of investments, like preventive care, would go to other companies. However, failing to recognize re-enrollment gives an incomplete picture of possible future benefits. It may indeed make financial sense to investment in health benefits now, even with high turnover, as a portion of members will return when the investments’ benefits accrued.

Although these findings show how re-enrollment can relate to investment decisions, the data only focused on a single large insurance provider. Ukert notes that further research that includes different sizes of insurers and that includes mortality data would further clarify how re-enrollment may affect insurers.

– by George Hale