Member Turnover Challenges Public Exchange Markets

Dec 20, 2016
Exchanges experience some of the highest churn of any regulated market. What can plans do to mitigate the financial burden caused by this constant turnover?
  • Public Exchanges

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In the current discussions about the advantages and disadvantages of the Affordable Care Act (ACA), one important challenge that goes unnoticed is the topic of member turnover. For every 10 Americans who enroll in the public exchanges, only six will re-enroll during annual open enrollment. The remaining 40% fall into member “churn,” meaning that they will enroll in Medicaid, Medicare or employer-sponsored coverage, or perhaps forgo health insurance altogether. This does not include members who stay within the public exchanges but switch to a new plan – another factor that exacerbates the issue of member turnover for health plans.

With some health plans leaving the public exchange market and an incoming administration looking to repeal the ACA, high member turnover is expected to continue into the 2017 enrollment period. Health plans, yet again, potentially face a membership churn of higher than 40%, leading to member care disruption and limiting a health plan’s ability to recoup costs over a patient's tenure.

Churn by therapy class

When looking at churn from a therapy class perspective, Express Scripts leverages data from our Therapeutic Resource Centers (TRCs) to segment out our member population to uncover additional insights. Member retention rates are relativity low across all therapy classes. However, the top five costliest classes within the exchange population all have slightly higher member retention.

churn table

churn chart

What can plans do to mitigate churn?

There is little health plans can do to completely prevent members from leaving the exchanges or changing plans. Membership churn is an unfortunate reality of an evolving marketplace. However, plans can mitigate costs associated with churn by focusing on strategies to manage drug waste and lowering overall drug costs.

Express Scripts Health Care Reform experts partner with clients to optimize:

  • Utilization management – Advanced Utilization Management (UM) programs guide patients to safer, more cost-effective drug choices in some of the costliest categories. Clients should consider strategies to not only avoid some of the costs associated with a member leaving the plan but also for remaining members on high-cost drugs.
  • Channel management – Ensuring members use the appropriate channel and the optimal day’s supply for their medication.
  • Formulary strategies – Aggressive cost-effective based formularies with closed or incentivized features, further ensures members make the correct choice to the lowest cost clinically appropriate drug for their condition.
  • Condition specific solutions – Programs such as Express Scripts SafeGuardRxSM isolate and focus on the highest cost conditions for plans, such as diabetes and inflammatory conditions, and apply a holistic approach to reduce costs while providing members with the best care.

Bringing it all together

At Express Scripts, we have been supporting clients in regulated markets for more than 20 years. We are always looking for innovative ways to help our clients tackle the unique challenges that come with supporting government programs. That’s why we are currently developing an enhanced integrated solution suite to better manage the costs specifically associated with member churn in the public exchanges. We look forward to bringing this to our clients in 2017.

Author Bio

Jose Diaz
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