MEDICAID MANAGED CARE: Despite Declines, Retains Key Role

      A recent Kaiser Family Foundation white paper takes a look at the declining participation of managed care plans in Medicaid, examining changes in full-risk Medicaid managed care from mid-1996 to mid-1997 and uncovering mid-1998 trends in the 15 states with the highest Medicaid enrollment. Some key findings:

• Commercial plans covered 6 million Medicaid enrollees in 1997 -- 64% of all Medicaid beneficiaries enrolled in full-risk managed care -- suggesting that commercial plans continue to play a prominent role in the Medicaid market. But more recent data show that, among the 15 states with the largest Medicaid enrollment, the percentage of enrollees covered by commercial plans continues to decline, "though not substantially."
• Commercial plans "withdrew from the Medicaid market much more often and entered it less frequently in 1997 and 1998 compared with previous years." Among the 15 states with the highest Medicaid enrollment, the annual withdrawal rate was 18% in 1997 and 15% in 1998, "compared with 7% to 8% each year from 1994 to 1996." On a national level "44 commercial plans entered the Medicaid market in 1997 compared with 54 the previous year."
• Commercial plan drop-outs occured most evidently "in states with older, larger Medicaid managed care programs and among plans that were large and affiliated with a national managed care firm or Blue Cross and Blue Shield."
• While 12 states had a net loss in commercial Medicaid plans from 1996 to 1997, 15 states had a net gain.