Enrollment in managed Medicaid plans on the rise

Enrollment in managed Medicaid plans is on the rise, according to Mark Farrah Associates, a Kennebunk, Me.-based data aggregator and publisher of health plan market data.

Based on an analysis of U.S. Census Bureau data by MFA, nearly 47.8 million people were enrolled in Medicaid programs in 2009, and at that time roughly 33.6 million, or 70 percent, were covered by comprehensive Medicaid managed care programs.

MFA's analysis of Medicaid enrollment data filed with the Centers for Medicare and Medicaid Services and the National Association of Insurance Commissioners found total Medicaid membership grew by 11 percent from June 2008 to June 2009. By December 2010, managed Medicaid enrollment grew to an estimated 35 million Medicaid beneficiaries, up an additional 5 percent.

More current NAIC enrollment data was used for Medicaid plans required to file statutory financial statements. In cases where NAIC data was unavailable, June 2009 CMS enrollment data was applied to provide a more comprehensive assessment of overall growth.

Because individual states operate their own Medicaid programs, this segment of the health insurance market has not become heavily concentrated in national companies. However, at least seven public companies contract with Medicaid agencies to provide managed care services. Five of these public companies enrolled more than 1 million Medicaid members as of the second quarter of 2010.

UnitedHealth, the largest commercial company with a presence in the managed Medicaid market, increased its enrollment in subsidized plans by 30 percent between June 2009 and June 2010, according to MFA's analysis. UnitedHealth currently offers managed Medicaid products in 20 states.

Among other public companies in the managed Medicaid business, four specialists in government-sponsored healthcare – AmeriGroup (12 states), Centene (seven), Molina (nine), and WellCare (seven) – all maintained or increased market share, and most reported membership growth.

[See related story: Membership continues to fall for top health plans]

In addition to comprehensive managed care plans, many states are using limited care management strategies. The most common are primary care case management (PCCM) systems, under which practitioners are paid a capitated fee to manage medical care in addition to fees for services rendered and prepaid plans covering only ambulatory or inpatient medical care.

In June 2009, about 24.7 million Medicaid beneficiaries (74 percent) were covered by either a commercial plan or Medicaid managed care organization. In addition to the 24.7 million covered by comprehensive plans, 7.3 million were signed up with PCCMs and 1.6 million were enrolled in limited plans for ambulatory or inpatient care (CMS is expected to release data collected for June 2010 in the next few months).

All but four states offer or require Medicaid beneficiaries to be enrolled in programs to manage Medicaid beneficiaries' medical care. Alaska and Wyoming have no Medicaid managed care, Mississippi's beneficiaries are covered by a prepaid transportation plan, and New Hampshire uses a disease management program to care for beneficiaries with chronic diseases. All other medical care in these states is compensated on a fee-for-service basis.

Many state Medicaid agencies use separate "carve-out" contracts to cover dental, prescription drug, mental health and disease management services. Some national companies offer such specialty plans; for example, UnitedHealth covers more than 36,000 Rhode Island Medicaid beneficiaries in a dental plan.

However, most carve-out contracts go to companies that specialize in the services provided, such as Logisticare for non-emergency transportation, McKesson for disease management and ValueOptions for mental health plans. Most are risk-based, capitated arrangements.

As of June 2009, based on Medicaid figure reported to CMS and the NAIC:

• 8 million Medicaid beneficiaries were enrolled in limited mental health plans in 18 states, including programs treating them for substance abuse. In some states, beneficiaries were enrolled in both inpatient and ambulatory mental health programs.


• 6.1 million received non-emergency transportation through prepaid plans in 13 states.


• 1.9 million were enrolled in dental plans in six states.


• 1.2 million received prescription drug assistance from a pharmacy benefits manager in Tennessee.

As more commercial companies show interest in this segment, state regulators are proposing cutbacks to Medicaid programs.

In Arizona, Gov. Jan Brewer announced a proposal to freeze enrollment in Medicaid programs, require some beneficiaries to pay more for their care and reduce provider payments to reduce budget shortfalls. In New York, Medicaid, which is a sizable portion of the state budget, is a divisive topic among legislators. Ohio Gov. John Kasich has also proposed reshaping Medicaid in his state to help close an $8 billion budget gap.