Medicaid enrollees and states may experience some temporary turbulence when managed care organizations choose to leave a state, but a new study finds that plan exits do not create significant changes in market-level quality or self-reported patient experience. This information may be useful to states as they contemplate a future with potentially fixed federal funding that is essential to GOP efforts to overhaul the Affordable Care Act, the study’s lead author suggests.

Using CMS enrollment data from 2006-2014 and health plan performance information from the Healthcare Effectiveness Data and Information Set and the Consumer Assessment of Healthcare Providers and Systems survey compiled by the National Committee for Quality Assurance, researchers from several universities conducted three separate analyses to estimate the link between a plan exit and health care quality. The retrospective study, published June 27 in the online Journal of the American Medical Association, included 366 MCOs, of which 106 exited the Medicaid program during the study period. Those exits impacted 4.8 million enrollees, or a mean of 606,039 annually.

The frequency of plan exits varied considerably from year to year, and there was significant geographic variation in the rates of health plan exits among states, observed the study. For instance, six states had a mean of more than 10% of their Medicaid managed care recipients who were annually enrolled in plans that exited, while 10 states experienced no plan exit during the study period.

“I think we were most surprised by the variation of health plan exit across states,” remarks Chima Ndumele, Ph.D., lead author with the Dept. of Health Policy and Management at Yale School of Public Health. “For Medicaid recipients, it’s shocking to what extent the state you live in is directly related to the likelihood that you experience the disruption associated with your insurance plan exiting your market,” he tells AIS Health.

Meanwhile, plans that left their respective markets had lower performance in quality of care and lower ratings in patient experience than those that stayed. And plans that exited a state’s market performed significantly worse prior to exit than those that remained in terms of preventive care, maternity care and patient experience, with no significant difference in chronic disease management. Moreover, in the year following a plan exit, changes in the quality of care experienced across the market were not statistically significant and most beneficiaries who were impacted by exits could obtain coverage from a higher quality plan. For example, 78.3% of available plans in the same county were higher quality based on the preventive care composite, added the study.

While the paper did not directly look at predictors of plan exits, those that exited markets generally had fewer enrollees and lower market share, notes Ndumele, “so presumably they had less of a healthy risk pool of recipients to withstand the effect of sicker enrollees.” Compared with nonexiting plans, those that left also tended to have fewer years of experience.

“States have increasingly moved enrollees to managed care as a mechanism to reduce costs; however, states should be aware that partnerships with private managed care companies end frequently, with real potential disruptions of care for some recipients,” adds Ndumele. “That being said, health plan turnover in Medicaid doesn’t appear to be entirely bad for markets. Plans that leave markets perform, on average, poorer across multiple dimensions of quality than plans that remain.”

On the flipside, if the Medicaid market becomes less attractive to insurers due to proposed health reforms that include the federal government spending 35% less on Medicaid by 2036, “A concern with the proposed cuts is that when plans leave, there won’t be plans to replace them, which could have negative implications for competition and quality.”

View an abstract of the JAMA study at