Kaiser Family Foundation Survey on State Medicaid Managed Care ...

Looking ahead: Medicaid managed care expansion and health reformKey Section Findings: States expect to rely increasingly on managed care to serve Medicaid beneficiaries.Severe budget pressures remain a key challenge for states, and new demands associated withhealth reform also emerge as issues.While some states see barriers to Medicaid MCOs becoming Exchange plans, others expectMCOs to seize the Exchange as a market opportunity.Key health reform implications for Medicaid managed care are yet to come into focus in manystates.Under the ACA, beginning in 2014, Medicaid eligibility will expand to reach nearly all Americans underage 65 with income below 133 percent of the federal poverty level, and others up to 400 percent of thepoverty level will be eligible for subsidies to purchase coverage offered through new health insuranceExchanges. An estimated 16 million additional people – mostly, uninsured adults – are expected to gainMedicaid coverage by 2019, and a similar number will gain coverage through the Exchanges. The healthreform law envisions seamless transitions and coordination between coverage programs when peoplemove from one to the other due to changes in their income or other circumstances.Although it is widely expected that managed care will play a growing role in Medicaid under healthreform, until this survey, there has been no systematic assessment of states’ plans in this regard, or ofthe capacity of their MCOs to absorb new Medicaid enrollment. To gauge how prepared states are forthe Medicaid expansion and the coordination challenges ahead, the survey asked states that contractwith MCOs several questions about the future of Medicaid managed care under health reform.States expect to rely more on managed care in the near term. Continued budget pressures and interestin improving service delivery and payment systems are fueling states’ plans to expand the use ofmanaged care in Medicaid. In all, 27 states (of 45 responding) indicated that they expect to rely onMedicaid managed care to a greater extent. Of these 27 states, six specified that they have plans tomandate managed care enrollment for additional Medicaid populations (California, Kentucky, Louisiana,Michigan, New Jersey, and South Carolina), and four reported that they have plans to expand managedcare to additional geographic areas (Florida, Kentucky, Texas, and Virginia).States see significant issues, challenges, and opportunities in the next couple of years. State budgetstrains and enrollment increases are both challenges that states cited frequently. The lingeringeffects of the recession – reduced tax revenues, high unemployment, and high demand for healthand human services programs (Medicaid, in particular) – all continue to generate intense pressure onstates already struggling to meet competing needs with limited resources.States also identified concerns about new demands on their capacity stemming from health reform,along with other issues. Increased Medicaid enrollment, adequacy of provider networks, Exchangedevelopment, and development of systems for claiming the proper federal matching rate wereamong the challenges states mentioned. States also cited a need for more flexibility to integrate carefor dual eligibles. Individual states identified several other issues and pressures, including the need49