Medicaid Managed Care Plans

By August 5, 2019 Commentary

Right on cue after Friday’s fulminating post regarding the private health insurance market, here is some information on the extent of Medicaid’s use of private managed care plans, brought to us by Mark Farrah Associates.   (MFA Report)   Like Medicare, Medicaid started out as a purely fee-for-service government run plan.  Extensive cost overruns, constant waste and fraud and abuse and other issues led the states to create opportunities for private plans to serve the Medicaid population.  At this point many states have mandated that almost all Medicaid beneficiaries must go into a managed care plan.  The Medicaid expansion in the last so-called health reform law was adopted by most states and has led to a dramatic rise in the number of Medicaid recipients and further opportunities for private plans.  By December 2018, almost 73 million Americans were enrolled in Medicaid and if the hold-out states, particularly Texas and Florida, undertake Medicaid expansion, that number will grow significantly.  As the reality of the costs of the expansion begins to hit state budgets, they have been asking for federal waivers to add restrictions to the program like work requirements, copayments, and engagement in healthy behaviors.

The leading private companies in terms of Medicaid enrollment as of the end of 2018, according to MFA, are Centene with around 6,030,000 members, or a 12% market share; Anthem, with 5,400,000, about an 11% share; UnitedHealth with 5,220,000, a 10.5% share, and Molina with 3,160,000 or a 6.3% share.  Wellcare has over 2,300,000 and is currently being acquired by Centene, which will substantially boost the combined companies share of the market.  Total membership in managed plans is around 49 million, but this may be an undercount.  Membership can grow or decline rapidly for specific companies, as states routinely conduct competitive bidding rounds to determine which plans will participate in their managed Medicaid programs.  It is likely that at least two-thirds of all Medicaid beneficiaries are in a managed care plan.  As with Medicare, these plans routinely out-perform fee-for-service government-run Medicaid both in cost control and quality.  More states are turning to managed Medicaid because of the generally good experience with use of private plans.  So tell me again why Medicare for All and similar single-payer, government operated health care plans would be a good idea?

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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