The Dual Eligible Opportunity for Managed Care
The dual eligible market, with nearly 9 million members, represents a $300 billion opportunity for health plans.  The stakes are huge, but so are the challenges – even for Medicaid and Medicare plans accustomed to the ins and outs of government-sponsored programs.  During this keynote address, you’ll get a clear assessment of the size and profit potential of duals for managed care – as well as an understanding of type of skill-sets and investments required to succeed.

Kevin Hayden President of State-Sponsored Business WellPoint

Assessing the Dual Eligible Pipeline: Which Health Plans Are Best Positioned to Win Question: Which health plans are the most likely to benefit from the dual eligible market – Medicare or Medicaid plans?  Answer: Both.  However, Medicaid is probably best positioned to take the bigger share.  On this panel, you’ll get a competitive assessment of which health plans are most likely to win big in the dual eligible market and why. 

Tom Kelly President & CEO Schaller Anderson an Aetna Company

Legal and Regulatory Challenges in the Dual Eligible Market: A State-by-State Assessment
Competing in the managed dual eligible market means keep tabs on a wide variety of legal and regulatory issues on both the state and federal level.  On this panel, you’ll get a breakdown of trends, developments and key areas of concern on the legal and regulatory front– information essential to planning any dual eligible strategy.

Thomas Johnson President and CEO Medicaid Health Plans of America

Fundamentally, things aren’t going to be as good for managed care in 2012 as they were in 2011 — While pricing remains above cost trends this year, the spread isn’t nearly as wide as it was in 2011, primarily because premium rates have moderated. In addition, favorable prior year development will now be subject to the minimum MLR calculation, which wasn’t the case last year.

Additional details available here.

While the short-term outlook is solid, the report notes:

Longer-term, however, health plans face broad profit pressures largely tied to healthcare reform.  These include rebates, taxes and participation in low-margin insurance exchanges.  Even without reform, health plans continue to face a variety of structural issues that hamper long-term profit prospects – including deterioration of fully funded membership and the shift toward low-premium high-deductible health plans.  The advent of ACOs also threatens the relevance of health plans by diminishing the industry’s central role in managing risk.

One bright spots is Medicaid, with states turning to managed care plans to control costs and because of expanded eligibility under reform.  Dual eligible are also expected to be an area of membership growth for managed care.  Fully funded commercial membership is expected to be flat to down.

He cites long-term CBO projections that the primacy deficit (which excludes interest payments) will bottom out at 2.6% of GDP in 2018 and then rise to 7.4% by 2040.  The entire increase will come from rising healthcare costs. Notes Blinder:

We have a huge problem of exploding health-care costs, part of which show up in Medicare and Medicaid spending.

Other “deficit myths,” Binder argues, include the notions that Americans are demanding deficit reduction like never before (they’re not, he says) and that the deficit problem is so acute it requires immediate spending cute despite the bad economy (it isn’t, he says).

Additional details available here.

The question is what does this say about premium price competition?  Citi notes:

There’s no question premium rate increases will be lower in 2012, in part driven by more aggressive Blue Cross pricing. That said, plans are still pricing above the current cost trend, so provided utilization remains low, margins at the publicly traded plans can still improve in 2012.

Carl Mercurio
President, CRG