- Medicaid insurers adoption of commercial practices, such as paying broker commissions, engaging in more marketing and slowly increasing provider payments, positions them as an increasingly competitive force in the Affordable Care Act marketplaces, a new report from the Urban Institute and Robert Wood Johnson Foundation finds.
- By employing tighter networks, leveraging lower provider rates and keeping their administrative costs down, Medicaid insurers have taken their experiences from the Medicaid program and applied them successfully to the individual market, the report found.
- At the same time, commercial insurers have adopted cost-containment strategies employed by Medicaid insurers, such as narrowing networks for more favorable provider payment rates.
Record unemployment numbers and the resulting loss of employer-sponsored health insurance mean ACA marketplaces will likely be a valued resource for America's uninsured, according to Wednesday's report.
Prior to 2014, Medicaid insurers had not sold insurance in private insurance markets.
And despite initial skepticism about both national chains and local "homegrown" managed-care organizations' ability to enter and be competitive in a new market, the report found they've been able to do just that.
Researchers spoke with representatives for state insurance departments, insurance brokers, hospital associations, consumer advocacy groups and others in six states — Arkansas, California, Florida, New York, Ohio and Washington, between December and February. Each had one or more Medicaid insurers participating in the marketplace for the 2020 plan year.
Five of the six states have robust Medicaid managed-care programs, with at least three-quarters of Medicaid beneficiaries enrolled in a comprehensive, risk-based managed-care program, according to the report.
Across all six states, Medicaid insurers participate in 80 of 127 marketplace rating regions. In 54 of these 80 regions, a Medicaid insurer offers the lowest-cost silver plan.
Respondents largely credited Medicaid insurers with increasing choice and affordability in the individual health insurance market. They said there are no longer major distinctions between Medicaid and traditional commercial insurers in the marketplace and no indications of undermined competition.
Another recent report from the Robert Wood Johnson Foundation and Urban Institute found Medicaid managed care plans to be a newly competitive force, despite the fact Blue Cross Blue Shield companies, including those from giant Anthem, accounted for nearly half of ACA marketplace enrollment in 2018.
Other Medicaid managed care payers, such as Centene and Molina, typically offer lower premiums than BCBS plans, yet their enrollment was just a little more than half of the Blues plans, that report found.
In nine states — Arkansas, Florida, Hawaii, Kansas, Michigan, New Jersey, Pennsylvania, Tennessee and West Virginia — BCBS plans have the majority of enrollment, but face increasing competition from other insurers, typically Medicaid insurers.
In eight states — Arizona, Georgia, Indiana, Kentucky, Mississippi, New Mexico, Ohio and Texas — Medicaid insurers make up the majority of marketplace enrollment. Medicaid insurer market share on the exchanges overall ballooned from 15% of the marketplace in 2016 to 27% by 2018.