Dive Brief:
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While policymakers argue over pre-existing conditions and Medicare for all, Medicaid is quietly transforming care for millions of Americans, a new report from A2 Strategy Group argues.
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Medicaid managed care has expanded in recent years despite 1.1 million fewer people covered by Medicaid this year than in 2017. This is the first year since the Affordable Care Act that the Medicaid managed care market shrunk.
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A2 Strategy Group said the reasons for the decline include no new states expanding Medicaid over the past year, the strong economy and low unemployment rate and that Medicaid "appears to have reached a natural ceiling."
Dive Insight:
Nearly three dozen states have expanded Medicaid. Virginia and Maine are expected to join that group in 2019 after the Virginia legislature and Maine voters approved expansion plans.
Other states, including normally red states like Utah, Nebraska and Idaho, also have ballot questions about expanding the federal/state health program next month. Height Capital Markets predicted all three states will approve expansion, which opens the program to people with incomes at or below 138% of the federal poverty level.
If those states approve expansion, only 14 states will have not broadened their program.
There was a time when people viewed Medicaid as strictly a safety net health insurance program for the poorest Americans. Now, expansion is viewed as a critical piece of health insurance coverage that provided coverage to 15 million people.
National enrollment for Medicaid dipped by 1.5% to 74.2 million Americans in 2018. That's a drop of 1.1 million people. Overall, two-thirds of states reported negative enrollment growth in 2018. However, looking at the numbers since the ACA, 45 states and the District of Columbia have increased enrollment.
Even with the small decrease this year, Medicaid still covers nearly 23% of the U.S. population. That includes one-third or more of residents in District of Columbia, New Mexico and California.
Medicaid expansion ballooned beneficiary numbers, which also increased costs to states. A recent HHS Office of the Actuary report on Medicaid projected the program's expenditures will grow at an average annual rate of 5.7% over the next decade — faster than the gross domestic product. The report warned that Medicaid's expenditure growth could strain federal and state budgets.
The cost trend has some states looking to bend the Medicaid cost curve. A handful of states have implemented work requirements as a way to get more people into the workforce and off Medicaid, though the program's success has been debated.
Another cost-containment trend that isn't so severe is Medicaid managed care. Nearly three-quarters of the Medicaid population is now covered by a managed care plan. That includes all Medicaid recipients in Tennessee and Hawaii and almost all in Louisiana and New Hampshire.
Over the past five years, 21 million people have been added to Medicaid managed care plans. At the same time, that market has consolidated. Private Medicaid plans decreased by about 10% in 2017. This year saw the fewest number of Medicaid managed care payers in five years. Seven Medicaid plans were bought in the past year, including purchases by Centene, Magellan and McLaren.
Though the Medicaid managed care market is stable, the report warned of potential concerns like limited growth opportunities, greater funding pressure and having to cover more complex members.
Those issues are already evident in some states. A2 expects all states will feel those pain points eventually.
"The future of Medicaid will look much like the past — sizable, significant, meaningful, and complex. In many ways, 2018 was, and 2019 likely will be, a transitory period ushering in the next era of Medicaid," according to the report.