Questions Raised Over Expansion of Medicaid Managed Care Programs
With Medicaid expected to cover at least 50%, or 16 million, of the U.S. residents who will gain health insurance under the new health reform law, Medicaid insurers or HMOs are expected to play a prominent role in controlling the program's costs, though such involvement has generated an influx of controversy, the Washington Post reports.
Present State of Affairs
Currently, 70% of the 48 million individuals enrolled in Medicaid are in a managed care plan. The majority of states contract with private companies to cover most Medicaid beneficiaries.
New companies are entering the managed Medicaid market that is dominated by large insurers -- such as WellPoint and UnitedHealth -- and companies that specialize in Medicaid coverage, such as Centene, Molina and Amerigroup.
Private insurers increasingly are lobbying state lawmakers to outsource more Medicaid coverage, citing many states' budget concerns.
Insurers' Point of View
Insurers argue that they can save states money by cutting unnecessary treatments, such as avoiding dialysis for individuals with diabetes by managing their care.
Some studies have shown that managed Medicaid slowed cost increases without harming patient care in certain states and even improved care in certain cases.
Most economists say that managed care is more efficient than a system in which doctors and hospitals are reimbursed separately for each treatment. States generally pay insurers a per-person rate and the companies then negotiate rates with hospitals and physicians.
However, numerous problems have been cited with managed Medicaid plans. One recent report found that 2.7 million children enrolled in Medicaid in nine states -- the majority of which outsourced the program to private insurers -- did not receive required screenings and immunizations.
Milwaukee's two largest provider networks recently broke ties with Centene after the insurer allegedly raised profits at the expense of patient care.Some experts say Medicaid beneficiaries might be less likely to object when treatment is withheld from them. In addition, states could face conflicts in investigating insurers they hired to reduce costs (MacGillis, Washington Post, 7/8). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.