This report argues that states’ Medicaid eligibility tests, which often cause families to un-enroll and re-enroll in Medicaid programs, often cost Medicaid more because of poor management of chronic conditions than would allowing individuals to remain in the program over small periods of ineligibility.  The ACAP report advocates passing a Medicaid Continuous Quality Act to establish 12-month continuous Medicaid eligibility and calculates that the move will cost more in the short-term but save in the long-term because continuously enrolled patients have lower average costs.

From report:

The Medicaid Continuous Quality Act proposal would make 12-month continuous eligibility standard for most Medicaid enrollees. Currently, this is an option for children, but not for adult aged, and blind and disabled populations in Medicaid. It would also call for analyses of the effect of this change and recommendations on how to further improve continuity of coverage. The proposal would also direct the Secretary of Health and Human Services to develop procedures to ensure that quality monitoring is conducted in Medicaid PCCM and fee-for-service arrangements, just as it is now for Medicaid managed care, in order to make fair assessments across all modes of care. This proposal would support bipartisan goals for national health reform. It will lower the number of people who lack health insurance coverage and improve the security, continuity and quality of care they receive. It will ensure more efficient and cost-effective care, both from the perspective of medical and administrative expenses. And by making efforts to measure quality of care in Medicaid more comprehensive, it will ultimately help program administrators improve the quality of services delivered in Medicaid and improve the value of care received.

Full report:  Improving Medicaid's Continuity of Coverage and Quality of Care (PDF | 749.44 KB)

Association of Community Affiliated Plans (ACAP). (2009). Improving Medicaid's continuity of coverage and quality of care. Ku, L., MacTaggart, P., Pervez, F., & Rosenbaum, S.