The hidden costs of healthcare churn

0:01NPR.

0:11This is The Indicator from Planet Money. I'm Waylon Wong, and I'm joined today by Lillian Kerwake from member station Oregon Public Broadcasting. Hi, I'm here to talk about something that is very American, as American as apple pie and baseball, healthcare churn. And just as fun. Churn is the term for when people switch insurance plans, and it's particularly bad in the U.S. And that's because of the segmented and sometimes chaotic way we approach health insurance. Yep. One year you might get insurance through your parents and then you turn 26, you get kicked off. Maybe you get insurance through your job.

0:47But if you drop down your hours at work, you might then lose insurance. Good news. You now qualify for Medicaid. But the month after that, if you make$1 too much, poof, Medicaid is gone and you're scrolling through marketplace plans like it's Tinder. I am exhausted just thinking about this. Every time I've switched jobs, you know, you have to look at the packets and choose a new plan. And it's always really confusing. All the names sound the same. There's so much jargon. Yeah. And it's not just annoying. It's also expensive. Today on the show, healthcare churn. Why Americans switch plans so much and how that can cost a lot in money and in health.

1:23We'll also meet a West Virginia mother who spent 20 years trying to get a diagnosis in the middle of the churn cycle. Her solution wasn't what you would expect. This message comes from LPL Financial. What if you could have more control over your future? LPL Financial removes the things holding you back and provides the services to push you forward. Because when it comes to your finances, your business, your future, LPL Financial believes the only question should be, what if you could? LPL Financial, member FINRA SIPC. No strategy assures success or protects against loss. Investing involves risk, including possible loss of principal.

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2:38So churn, not the delicious butter kind, but healthcare churn. People churn a lot more in America. Yeah. In other countries, people might switch health insurers a few times in their life, or never if they have universal coverage. But here, the majority of Americans get their insurance from their employer or the marketplace. And around 20 % change plans every year. And changing coverage can mean delays in treatment and worse health outcomes. To talk about this, I called up someone who knows all about how the U.S. healthcare system doesn't work. Every system has its defects. Ours are more egregious than everyone else's.

3:16That's Ezekiel Emanuel, an oncologist and one of the architects of Obamacare. He's been thinking about how to fix the U.S. healthcare system for decades. He even wrote a book called Which Country Has the World's Best Health Care? Spoiler alert, not the U.S. No, it is not. One of the problems is that Americans get health insurance in so many different ways, through employers, the exchanges, through Medicaid or Medicare. There are hundreds, if not thousands, of insurance options. All of them have different eligibility criteria. All of them have different benefits. All of them have different co-pays and deductibles, fragmentation leading to enormous complexity.

3:56And this complexity means Americans just don't stay with the same insurer for very long. That can lead to delays in treatments as patients sort out how to get care under a new insurer, something I think many Americans have experienced when they start a new job. New insurance company, new group of doctors that they cover, hospitals that they cover, new requirements, you know, which drugs they're covering, how much you have to pay for different things. And that leads to an enormous number of challenges. And sometimes patients don't even enroll in low-income health programs like Medicaid at all because they know they'll lose coverage if they start making more money.

4:35They think, well, if I sign up for Medicaid and go through it, you know, then, you know, next year I won't have it. It'll be a lot of effort, you know, not worth it. Because Americans change plans so often, there's not much incentive for insurers to spend money now on expensive care when it won't pay off for years, sometimes even decades. The biggest impact of churn, if you ask me, it disincentivizes insurers from investing in any change in practice or preventative tests or other things where the benefit is going to be years from now. You're no longer going to be insured by me. You've churned out.

5:16Those kind of delays in treatments and diagnosis can be really dangerous and expensive for patients. Dana Taylor from Ripley, West Virginia, has been dealing with this for years. She's a stay-at-home parent and also a pageant queen, the reigning Miss USA Prime. I had her describe her competition dress because when else do I get evening gowns in a healthcare story? A strapless red gown with beating all the way down it so it sparkled. And then it had a chiffon side cape. Ooh, a side cape. I don't even know what that is, but it sounds fancy. It's very fancy and very glamorous. While she was donning this glamorous attire, though, she was also dealing with lupus, which is an autoimmune illness where the body attacks its own organs.

6:02Dana started having symptoms when she was 16 years old. She felt tired all the time and had excruciating pain in her kidneys. My family doctor thought for sure it was lupus. She wanted to run all the tests for lupus. But insurance wouldn't approve those diagnostic tests. They kept hitting the pause button on simple things that could have been looked at early on. Her mom's insurance through her work would only approve opioid painkillers, which Dina didn't want to take. So from 16 to probably 25, I was handed bottles of pain pills like they were candy. Lupus can cause a lot of pain, but opioids don't treat the underlying cause.

6:41There's a specific type of drug called immunosuppressants, which can target lupus and prevent long-term damage to organs. When people with lupus don't get this kind of treatment, the progression can be disabling, even deadly. But lupus drugs can be very expensive, in the thousands of dollars per month. So insurance isn't always eager to approve them. For the next 20 years, Dana ended up going in and out of the ER without a diagnosis or lasting treatment. She switched insurance several times, and every time she had to restart the process with no solution. I felt like it was a losing battle for me, and I was stuck living how I was going to live.

7:20She struggled with pain for years, got married, had kids. Her husband had a well-paying job, but that didn't fix things. His employer insurance plan wasn't affordable at$3 ,000 per month for their family of five. So the family had no health insurance. But here's the counterintuitive thing. Stopping using insurance was the key to getting Dana treated. At the age of 35, she traveled out of state to a rheumatologist. She paid about$200 without insurance for the visit and$400 cash for the elusive diagnostic labs. After 20 years of fighting with four different insurance plans, she was diagnosed and prescribed a drug that actually targets her lupus instead of just her pain.

8:03Within months, she felt like a different person. I often wonder, what would my life have looked like? What would it have been like had I not been handed pain pills, been dismissed, been thrown out the window, instead of just saying, let's run a couple tests? Her lupus medication is effective, but expensive at$5 ,000 per month. She currently gets it through a free program from the drug company for uninsured patients. But she worries that the program could end at any time, or her husband's income will be too high for her to qualify. Her story illustrates what Ezekiel Emanuel believes. Churn turns our health care system into a sick care system.

8:43It creates a disincentive to doing exactly what we all claim we want to do. Let's have a health care system where people are kept healthy and not treated only when they're at the most expensive moment when they're sick. It's worth noting that the health insurance industry is not a fan of health care churn either. The constant revolving door costs the industry more money in terms of marketing for new clients and higher long-term health care costs. Industry groups have asked for regulatory reform to address the issue. Ezequiel has lots of ideas, like automatic re-enrollment. Or decoupling health care coverage from employment.

9:20Making open enrollment every five years instead of every year. We could pay doctors more for better health outcomes. He has a long list. There are solutions. It's not clear we have the political will to do them. That's the way I would put it. This episode was produced by Andrew Correras with engineering by Kweisi Lee. It was fact-checked by Sierra Juarez. Kicking Cannon edits the show and the indicators of production of NPR.

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