Bulk of Medicaid to be managed care in two years: Avalere

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Dan Mendelson, CEO of Avalere Health
Dan Mendelson, CEO of Avalere Health

More than three-quarters of Medicaid beneficiaries will be enrolled in a managed care plan as of 2016, according to an Avalere Health analysis released Thursday. The numbers reveal that managed care growth is especially strong in states that are expanding Medicaid.

As of 2013, 67% of people in Medicaid and the Children's Health Insurance Program were in managed care. This will increase by 13.5 million people to reach 76% of total Medicaid/CHIP enrollment by 2016, Avalere determined through a “proprietary” enrollment model.

The growth of managed care is being driven largely by the Medicaid expansion under the Affordable Care Act, according to Avalere. New enrollees are disproportionately enrolling in managed care. In fact, out of 28 states that have said they will expand Medicaid, 16 and the District of Columbia plan to enroll more than 90% of newly eligible beneficiaries in managed care.

“This is a major business opportunity for plans, and often also helps to promote continuity of care as low income people migrate between Medicaid and subsidized exchange coverage,” stated Avalere CEO Dan Mendelson.

The numbers are the latest confirmation of a well-observed transition toward managed care, which means states contract with private health plans to deliver Medicaid benefits. Long-term care providers have expressed concern over this trend. They point out that Medicaid is the primary payer for institutional long-term care, and yet many of the private insurers in managed care have little expertise in this sector. Complex contracts, slow payments and an over-emphasis on cost containment are among other concerns.

However, some leaders have said the growth of managed care potentially could improve efficiency to help providers better serve communities.

The Avalere enrollment figures do not include people dually eligible for Medicare and Medicaid. Click here for the complete report.