Will states’ use of Medicaid managed care affect health exchanges?
By Javier Sanabria
A recent report by the U.S. Government Accountability Office (GAO) evaluated variations in states’ use of Medicaid managed care. The report clustered states into four groups that shared similarities in how services were provided and how participants were enrolled.
Here is an excerpt summarizing the GAO’s findings:
In summary, we identified four groups of states that differed in their use of Medicaid managed care on the basis of the 12 indicators we included in our analysis. A handful of these indicators—namely Medicaid enrollment in MCOs (managed care organizations) and PCCM (primary care case management) programs, HMO (health maintenance organization) penetration rates, and the concentration of low-income individuals that lived in urban areas—had significant influence on how states grouped. In contrast, within the four groups, considerable variation existed among the other indicators we examined, such as states’ primary care capacity and commercial HMO market index. For labeling purposes, we typically describe the four groups on the basis of states’ enrollment of Medicaid beneficiaries in MCOs and PCCM programs—generally the predominant similarity among the states within each group:
• Group 1 states were PCCM predominant, enrolling a high percentage of beneficiaries in PCCM programs, but typically not in MCOs;
• Group 2 states typically enrolled beneficiaries in both MCOs and PCCM programs;
• Group 3 states were MCO predominant, enrolling a high percentage of beneficiaries in MCOs, but typically not in PCCM programs; and
• Group 4 states were considered “other” states in that although their enrollment of beneficiaries was similar to Group 3, they were outliers on other indicators, which differentiated them from states in the other groups we identified.
The study was conducted to gauge states’ use of Medicaid managed care as enrollment is expected to increase, which is due to the Medicaid expansion provision in the Patient Protection and Affordability Care Act (PPACA). The policy decision that states make on Medicaid may directly affect health exchanges.