The expansion of Medicaid benefits for poor Americans under the Affordable Care Act (ACA) and the general move away from fee-for-service medicine helped boost enrollment in private health plans by 7.8 million beneficiaries in the last year, according to a new report.
Managed-care plans are taking on an unprecedented role in providing health coverage to poor Americans thanks in part to more states opting to go along with the Medicaid expansion. The Supreme Court three years ago gave states the option to expand their Medicaid programs and 30 have done so or are in the process of doing so.
Aside from the health law’s expanding of Medicaid benefits, an increasing number of Republican-dominated legislatures facing budget issues are handing off more of the administration of Medicaid to private plans in hopes they can better coordinate care. And it's a bipartisan movement with Republican governors leading the way despite their general opposition to the ACA.
In North Carolina, for example, the state will privatize its $15 billion Medicaid budget and enter into contracts with private insurers as well as “provider-led” entities to administer the health benefits of nearly 2 million of the state’s poor. The effort has bipartisan legislative support as well as the endorsement of Republican Gov. Pat McCrory.
“Even if no other state expands Medicaid (under the ACA), managed-care is going to increase its market share because states are moving away from fee-for-service medicine,” Jeff Myers, chief executive of Medicaid Health Plans of America (MHPA), the trade group and lobby that represents Medicaid plans, said in an interview. The report was released last week at MHPA's annual conference.
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Republican and Democratic state lawmakers and governors as well as the Centers for Medicare & Medicaid Services under the Obama administration and federal health administrators are shifting reimbursement away from fee-for-service medicine that pays providers based on volume to a value-based proposition that rewards outcomes.
“Fee-for-service is going away,” Myers said.
It’s been a boon for health insurance companies like
“Today, 51.3 million Americans receive physical health benefits from a private Medicaid health plan, or 70 percent of all beneficiaries,” PWC’s Ari Gottlieb, the report’s author, wrote. “Over the past year, private plans added 7.8 million beneficiaries while the number of Medicaid beneficiaries enrolled in fee-for-service or public managed care programs decreased by 1.4 million.”
