APR
13, 2017
54.7 million of the 75.2 million Americans covered by Medicaid–are
enrolled in private plans
Private health insurance companies stand to reap a bigger share of
the Medicaid business as states deal with budget shortfalls and increased
spending on medical care.
Illinois,
North Carolina and Oklahoma are among the larger states moving more of their states'
Medicaid beneficiaries under the management of private insurers over the next
two years. In addition, Florida and Mississippi are renewing Medicaid
managed-care contracts with states, according to Medicaid Health Plans of
America (MHPA).
"More
states are moving away from the fragmented care of the antiquated
fee-for-service model towards the capitated coordinated care model of managed
care organizations,” said Jeff Myers, president and CEO of Medicaid
Health Plans of America. “We expect this trend to
continue, especially as more states consider Medicaid expansion: states will
realize that such a move can only successfully be made with the budget
predictability that managed care provides."
It could
mean hundreds of thousands of new customers for health insurance companies
like Aetna AET +1.75%, Anthem ANTM +0.85%, Centene CNC +2.02%, Molina, UnitedHealth Group UNH +0.09% and Blue Cross and Blue Shield plans that are already
growing their Medicaid businesses.
In
Illinois, for example, Gov. Bruce Rauner has announced plans to move
more than 80% of the state’s
Medicaid beneficiaries into private health insurance plans. The state is amid a
bidding process for participating plans in what Rauner is calling a “Medicaid
managed care reboot.”
Illinois’
move will whittle the number of plans down from 12 to "up to seven"
in an effort to “reduce the administrative complexity,” Felicia Norwood,
director of the Illinois Department of Healthcare and Family Services said in
an interview. “The new Medicaid managed-care system will have more effective
procedures and guidelines.”
Managed-care plans have already taken on an unprecedented role in
providing health coverage to poor Americans. Part of this trend was fueled by
the 31 states that opted to expand Medicaid coverage under the Affordable Care
Act.
Consulting
firm PwC says 73% of Medicaid beneficiaries across the country–or 54.7 million of the 75.2
million Americans covered by Medicaid–are enrolled in private plans that contract with the Medicaid program. The figures are based on PwC’s
2016 report, which is the consulting
firm’s most recent.
But states like
Illinois are also generally moving to Medicaid managed care to deal with budget
issues.
“There
is a belief that there is more fiscal predictability when you move to Medicaid
managed care,” says Ari Gottlieb, a director with PwC Strategy&’s Health Strategy
practice.
The health insurance
industry is optimistic more of the 19 states that have yet to expand Medicaid
will do so now that Congress failed to roll back health benefits for poor
Americans under the American Health Care Act, also known as Trumpcare. House
Speaker Paul Ryan didn’t bring the AHCA to a vote because he didn’t have enough
support among members of his own Republican caucus.
In
North Carolina, key Republican Senators this week filed a bill to expand
Medicaid to more adults who don’t yet qualify for such coverage, according
to the News & Observer in Raleigh.
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