The hidden costs of healthcare churn

Summary

Summary of "The Hidden Costs of Healthcare Churn" – The Indicator from Planet Money

Release Date: June 12, 2025

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Introduction

In the episode titled "The Hidden Costs of Healthcare Churn," The Indicator from Planet Money delves into the complexities and repercussions of frequent health insurance changes in the United States. Hosted by Waylon Wong from Oregon Public Broadcasting and featuring insights from healthcare expert Ezekiel Emanuel, the episode unpacks why Americans often find themselves switching insurance plans and the profound impacts this churn has on both individual health and the broader healthcare system.

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Understanding Healthcare Churn

Healthcare churn refers to the frequent switching of health insurance plans by individuals. Unlike countries with universal healthcare systems where insurance changes are minimal or nonexistent, the U.S. experiences a high rate of churn due to its fragmented insurance landscape.

Key Points:

• Prevalence of Churn: Approximately 20% of Americans change their health insurance plans annually, primarily obtaining coverage through employers or the marketplace[^03:22].
• Causes of Churn: Factors include aging out of parental plans at 26, fluctuating employment statuses, income changes affecting Medicaid eligibility, and the cumbersome process of selecting new plans with similar-sounding options and complex jargon[^00:26][^00:40][^01:00][^04:01].

Notable Quote:

"Churn is the term for when people switch insurance plans, and it's particularly bad in the US and that's because of the segmented and sometimes chaotic way we approach health insurance." – Waylon Wong [00:26]

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Effects of Churn on Health and Finances

Frequent changes in insurance coverage can lead to significant delays in medical treatment and adverse health outcomes. The administrative burden and confusion often result in interruptions in care continuity.

Key Points:

• Delays in Treatment: Each switch requires patients to navigate new coverage rules, potentially delaying necessary medical interventions[^03:27][^04:21].
• Financial Strain: The constant need to review and select new plans incurs both time and monetary costs, exacerbating the stress associated with managing health care[^01:00][^05:05].

Notable Quote:

"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." – Waylon Wong [01:11]

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Expert Insights: Ezekiel Emanuel on Systemic Flaws

Ezekiel Emanuel, an oncologist and one of the architects of the Affordable Care Act (Obamacare), provides a critical analysis of the U.S. healthcare system's fragmentation.

Key Points:

• Fragmentation Causes Complexity: The multitude of insurance options with varying eligibility criteria, benefits, co-pays, and deductibles lead to an overwhelmingly complex system[^04:01][^04:16].
• Impact on Preventative Care: Churn discourages insurers from investing in long-term health initiatives since patients may switch plans before benefits are realized[^05:15][^09:17].

Notable Quotes:

"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." – Ezekiel Emanuel [04:01]

"Doing exactly what we all claim we wanna do. Let's have a healthcare system where people are kept healthy and not treated only when they're at the most expensive moment when they're sick." – Ezekiel Emanuel [09:05]

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Personal Story: Dana Taylor's Struggle with Lupus

The episode features the poignant story of Dana Taylor from Ripley, West Virginia, illustrating the real-life consequences of healthcare churn.

Key Points:

• Delayed Diagnosis: Dana battled lupus symptoms for nearly a decade without a proper diagnosis due to insurance denials and frequent plan changes[^06:30][^07:20].
• Financial Barriers: Despite her husband's stable job, the exorbitant cost of coverage ($3,000/month) left Dana and her family uninsured[^07:34].
• Self-Funding Treatment: At 35, Dana sought out-of-state medical care, paying out-of-pocket to receive a correct diagnosis and effective treatment[^07:58][^08:26].

Notable Quotes:

"I felt like it was a losing battle for me and I was stuck living how I was going to live." – Dana Taylor [07:34]

"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." – Dana Taylor [08:26]

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Industry Response and Potential Solutions

The insurance industry recognizes the inefficiencies and high costs associated with churn and has advocated for regulatory reforms to mitigate these issues.

Key Points:

• Financial Implications for Insurers: Churn increases marketing expenses for acquiring new clients and raises long-term healthcare costs due to inconsistent patient care[^09:34].
• Proposed Reforms:
  • Automatic Re-enrollment: Simplifying the renewal process to prevent unintended loss of coverage[^09:37].
  • Decoupling Coverage from Employment: Reducing dependency on job-based insurance to enhance stability[^09:40].
  • Extended Open Enrollment Periods: Moving from annual to multi-year enrollment cycles to provide greater continuity[^09:44].

Notable Quote:

"There are solutions. It's not clear we have the political will to do them. That's the way I would put it." – Ezekiel Emanuel [09:50]

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Conclusion

Healthcare churn in the United States represents a critical flaw in the nation's healthcare system, leading to both financial and health-related consequences for individuals. The episode underscores the urgent need for systemic reforms to reduce complexity, enhance stability in coverage, and prioritize preventive care. While expert solutions exist, the challenge lies in mobilizing the political and social will to implement meaningful changes.

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Production Credits

• Produced by: Angel Carreras
• Engineering by: Kwesi Lee
• Fact-Checked by: Sierra Juarez
• Editing by: Kicking Cannon
• Production of the Indicator from NPR

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Note: Advertisements and sponsor messages were excluded from this summary to focus solely on the episode's core content.

Transcript

[Host]

Npr.

[Waylon Wong]

This is the Indicator from Planet Money. I'm Waylon Wong, and I'm joined today by Lillian Karbake from member station Oregon Public Broadcasting.

[Host]

Hi, I'm here to talk about something that is very American, as American as apple pie and baseball.

[Waylon Wong]

Healthcare churn and just as fun. Churn is the term for when people switch insurance plans, and it's particularly bad in the US and that's because of the segmented and sometimes chaotic way we approach health insurance.

[Host]

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.

[Waylon Wong]

But if you drop down your hours at work, you might then lose insurance. Good news, you now qualify for Medicaid.

[Host]

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.

[Waylon Wong]

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.

[Host]

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. We'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.

[Liz Ann Saunders]

This message comes from NPR sponsor Charles Schwab with its original podcast on Investing. Each week, hosts Liz Ann Saunders, Schwab's chief investment strategist, and Kathy Jones, Schwab's chief fixed income strategist, along with their guests, analyze economic developments and bring context to conversations around stock, stocks, fixed income, the economy and more. Download the latest episode and [e-mail] on investing or wherever you get your podcasts. Support for NPR and the following message come from Edward Jones. A rich life isn't always a straight line. Unexpected turns can bring new possibilities. With a hundred years of experience navigating ups and downs, Edward Jones can help guide you. Let's find your rich together. Edward Jones, Member, SIPC this message comes.

[Kathy Jones]

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[Liz Ann Saunders]

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[Waylon Wong]

So churn. Not the delicious butterkind, but healthcare churn. People churn a lot more in America.

[Host]

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. And every year.

[Waylon Wong]

And changing coverage can mean delays in treatment and worse health outcomes.

[Host]

To talk about this, I called up someone who knows all about how the US Healthcare system doesn't work.

[Ezekiel Emanuel]

Every system has its defects. Ours are more egregious than everyone else's.

[Host]

That's Ezekiel Emanuel, an oncologist and one of the architects of Obamacare. He's been thinking about how to fix the US Healthcare system for decades. He even wrote a book called which country has the World's Best Healthcare?

[Waylon Wong]

Spoiler alert.

[Host]

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.

[Ezekiel Emanuel]

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.

[Waylon Wong]

And this complexity means Americans just don't stay with the same insurer for very long.

[Host]

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.

[Ezekiel Emanuel]

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.

[Waylon Wong]

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.

[Ezekiel Emanuel]

They 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.

[Waylon Wong]

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 decade.

[Ezekiel Emanuel]

The biggest impact of churn, if you ask me, it disincentivize insurers from investing in any change in practice or preventative test 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.

[Host]

Those 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 over 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?

[Dana Taylor]

A strapless red gown with beading all the way down it so it sparkled. And then it had a chiffon side cape.

[Waylon Wong]

Ooh, a side cape. I don't even know what that is, but it sounds fancy.

[Host]

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. Dana started having symptoms when she was 16 years old. She felt tired all the time and had excruciating pain in her kidneys.

[Dana Taylor]

My family doctor thought for sure it was lupus. She wanted to run all the tests.

[Host]

For lupus, but insurance wouldn't approve those diagnostic tests.

[Dana Taylor]

And they kept hitting the pause button on simple things that could have been looked at early on.

[Waylon Wong]

Her mom's insurance through her work would only approve opioid painkillers, which Dana didn't want to take.

[Dana Taylor]

So from 16 to probably 25, I was handed bottles of pain pills like they were candy.

[Host]

Lupus can cause a lot of pain, but opioids don't treat the underlying cause. There's a specific type of drug called immunosuppressants which can target lupus and prevent long term damage to organs.

[Waylon Wong]

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.

[Host]

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.

[Dana Taylor]

I felt like it was a losing battle for me and I was stuck living how I was going to live.

[Waylon Wong]

She 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.

[Host]

But here's the counterintuitive thing. Stopping using insurance was the key to getting Dana treated as 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. Within months, she felt like a different person.

[Dana Taylor]

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.

[Waylon Wong]

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 healthcare system into a sick care system creates a disincentive to.

[Ezekiel Emanuel]

Doing exactly what we all claim we wanna do. Let's have a healthcare system where people are kept healthy and not treated only when they're at the most expensive moment when they're sick.

[Host]

It's worth noting that the health insurance industry is not a fan of healthcare at Churn either. The constant revolving door costs the industry more money in terms of marketing for new clients and higher long term healthcare costs. Industry groups asked for regulatory reform to address the issue.

[Waylon Wong]

Ezekiel has lots of ideas like automatic.

[Host]

Re enrollment or decoupling healthcare coverage from.

[Waylon Wong]

Employment, making open enrollment every five years instead of every year.

[Host]

We could pay doctors more for better health outcomes. He has a long list.

[Ezekiel Emanuel]

There are solutions. It's not clear we have the political will to do them. That's the way I would put it.

[Waylon Wong]

This episode was produced by Angel Carreras with engineering by Kwesi Lee. It was fact checked by Sierra Juarez. Kicking Cannon edits the show and the indicators of production of the NPR.

[Kathy Jones]

This message comes from Thrive Market. The food industry is a multi billion dollar industry, but not everything on the shelf is made with your health in mind. At Thrive Market they go beyond the standards, curating the highest quality products for you and your family while focusing on organic first and restricting more than 1000 harmful ingredients all shipped at your door. Shop at a grocery store that actually cares for your [e-mail] podcast for 30% off your first order plus a $60 free gift. This message comes from Thrive Market. The food industry is a multi billion dollar industry, but not everything on the shelf is made with your health in mind. At Thrive Market they go beyond the standards, curating the highest quality products for you and your family while focusing on organic first and restricting more than 1,000 harmful ingredients, all shipped at your door. Shop at a grocery store that actually cares for your [e-mail] podcast for 30% off your first order plus a $60 free gift.