Corporate Research Group’s Weblog

I’d predicted in a prior post big gains in managed Medicaid enrollment as a result of healthcare reform.  What I neglected to point out is that Medicaid enrollment in general is already growing as a result of the down economy (up 5% in 2009, according to the latest data from the Kaiser Family Foundation).  In fact, Kaiser notes that every 1% increase in the national unemployment rate results in a 3-4% reduction in state revenues and an increase in Medicaid/CHIP enrollment of 1 million people.

The result is that cash-strapped states are increasingly turning  to managed care to control costs. The Kaiser report, titled The Crunch Continues: Medicaid Spending, Coverage and Policy in the Midst of a Recession, notes:

Medicaid managed care programs continue to develop and expand. In 2009, a total of nineteen states expanded service areas, added eligibility groups to managed care, required enrollment into managed care or implemented new long-term care managed care programs. In FY 2010, a total of 20 states (including seven states in the 2009 group, plus eight other states) adopted such policies….The most common managed care policy change involved enrolling individuals in the “Aged, Blind and Disabled” (ABD) eligibility group that previously had not been enrolled in managed care in that state. Other eligibility groups included children in foster care, persons in nursing homes, persons enrolled in specific waivers such as HIV/AIDS or persons receiving SSI.

Keep in mind that according to the Centers for Medicare & Medicaid Services, “managed” Medicaid includes not only Medicaid health plans, but also Primary Care Case Management (PCCM) programs, in which physicians receive a small fee to provide case management, as well as a variety of other programs.  Of the 60 million people who receive some form of Medicaid health insurance coverage (including comprehensive and limited benefits), about 21 million are enrolled in a Medicaid health plan. 

Either way, the numbers are growing, and the implications for state budgets, provider access, coverage and care are enormous.  And that’s even before reform. 

Btw, I took some heat from a reader for noting in a prior post that “Following reform, Medicaid plans with razor-thin margins will be adding millions of people without a clear understanding of their medical histories or their likely impact on medical cost ratios – all at a time when state budgets are hamstrung.  Should be fun.”

The reader asked me in an email: “What is your point?  Leaving healthcare in the state it is in currently?”

To set the record straight: My point is that reform will add millions to Medicaid managed care plans, and if these plans don’t make a profit, they will exit the Medicaid market potentially causing disruption for millions of people.  Said another way, my point is that the current reform effort doesn’t go far enough and is leaving the door open to many unintended consequences that could make things worse in some instances rather than better.

Said yet another way, the current reform effort (led by the Baucus bill) is simply an incremental step.  Reform will have to be revisited and will ultimately result in a single-payer system or a highly regulated public-private insurance market (either is fine with me).

Finally, as left-leaning Democrat, I don’t have any problem advocating a liberal point of view.  I do have a problem ignoring statistics and facts just because they don’t fit my worldview.  Ultimately, that is the point of my blog.