Benefit policy and disenrollment of adult Medicaid beneficiaries from the Oregon health plan.

Oregon's Medicaid program experienced a dramatic decrease in its non-categorically eligible adult members after implementing a new benefit policy in February 2003 for these beneficiaries. The policy included four main elements: premium increases for some enrollees; a more stringent premium payment policy; elimination of some benefits, including mental health and substance abuse treatment; and, the imposition of co-payments. The study compared monthly disenrollment rates eight months before and after the policy change. The new premium payment policy was found to be the main driver of disenrollment, followed by benefit elimination. Premium increases and co-payments had limited impact. Disenrollment was particularly high among vulnerable beneficiary groups, including people with no reported income, those previously obtaining premium waivers, methadone users, and other enrollees with substance abuse conditions. Better understanding of the relationship between benefit design and retention in public health insurance programs could help avoid the unintended policy effects experienced in Oregon.