health plan Federal protections from the Covid-19 pandemic, which since 2020 have barred states from removing Medicaid recipients even if they no longer qualified, have brought the number of people without health insurance to an all-time low.
They also created a windfall for health plans, which states pay to oversee the care of most Medicaid recipients.
These plans, many run by insurance titans including UnitedHealthcare, Centene and Aetna, have seen their revenue rise by billions as their membership has grown by millions.
With states set to begin disenrolling members who no longer qualify for Medicaid in April, the pandemic benefit closing date, insurers hope to retain those who are still eligible. And “capture” those who lose coverage with the plans of the markets established by the Affordable Care Act (ACA).
Except for the members themselves, for whom losing coverage could restrict access to care and leave them vulnerable to large medical bills, no one has more at stake than these insurers. The plans have a strong financial incentive to keep their members enrolled because states pay them per member, per month: the more people they cover, the more money they get.
The Biden administration estimates that 15 million of the more than 91 million enrollees in Medicaid will lose this coverage, almost half because their income exceeds the limits of the program and the rest because they do not complete the re-enrollment paperwork.
Of those who lose eligibility, about two-thirds will sign up for a health plan through their jobs, health insurers predict, and the other third will be split evenly between those who buy an ACA plan and those who opt out. are without insurance.
The financial ramifications for health plans of the so-called “rollback” of Medicaid are enormous, said Gary Taylor, a securities analyst at Cowen and Co. “It’s billions of dollars,” he said of the five largest Medicaid health plans. : Centene, UnitedHealthcare, Aetna, Elevance Well being (formerly Anthem), and Molina Healthcare.
Investor-owned businesses make pre-tax profit margins of about 3% on average on Medicaid managed care, slightly below what they make on ACA marketplace businesses, Taylor said.
How Medicaid Health Plan Protects Its Members
Therefore, moving members to an ACA plan could increase profits for these companies.
State Medicaid officials say they need help from health plans during this process to avoid a huge jump in the number of uninsured residents. Health insurers could help those who lose Medicaid coverage find alternatives, such as government-subsidized plans offered in the ACA marketplaces.
“In Nevada, our managed care plans are motivated to keep members enrolled,” Sandie Ruybalid, deputy administrator for the division of the Nevada state health department that oversees Medicaid, told a congressional advisory board in January. “Our managed care plans are innovative and we are relying on them to help us get through this.”
Ruybalid said his state doesn’t have a large advertising budget, like the giant insurers do, to educate affiliates on how to stay enrolled.
One way some companies hope to make up for lost Medicaid revenue will be by adding clients to their ACA plans.
Centene, the nation’s largest Medicaid health insurer with 16 million members, forecasts it will lose more than 2 million beneficiaries during the rollback. But he expects 200,000 to 300,000 people who go without Medicaid coverage will sign up for a Centene ACA plan, chief executive Sarah London told investment analysts in February.
In 15 of the 25 states where Centene offers Medicaid and Marketplace plans, the company will contact members about their ACA coverage options.
Although state Medicaid programs have used private insurers for years to control their costs and improve health, recruiting them to help with the eligibility of their beneficiaries is something new.
Health plans are often in a better position than state Medicaid agencies to connect with recipients because they are more likely to have their contact information up to date, state officials said.
Services Offered by Medicaid Health Plans
“We don’t have direct contact with our members all the time, and health plans interact more with them,” said Chris Underwood, managing director of the Colorado Department of Health Care Policy and Financing, the state Medicaid agency.
Since the state contracts with health plans to help members find doctors or help with other care needs, it’s not a big step for the plans to help with eligibility, he added.
Colorado health officials will initially contact Medicaid recipients and count on health plans to follow up with emails, calls and text messages, Underwood said.
Health plans will also direct members who are no longer eligible for Medicaid to the state’s ACA marketplace, which will help them enroll.
AmeriHealth Caritas, which has about 2.8 million Medicaid members across the country, will work with community organizations like churches, homeless shelters and food banks to get the message out about re-enrollment.
It will also email, text and call members to remind them, said Courtnay Thompson, market president for Choose Well Being, AmeriHealth Caritas’ South Carolina plan.
Thompson said strategies to reach beneficiaries will vary by state. Some will try to reassess the eligibility of all members in six months, while others will take more than a year. Some states will share their beneficiaries’ enrollment status with plans before they lose coverage.
UnitedHealthcare, which has about 8 million Medicaid members, said its call center representatives will remind members to re-enroll in the program.
The company will also put information about the need to re-register in its purple pharmacies and will use advertising online, on Facebook and Google. And it will work with their medical providers to make sure members understand the changes.
“We are very aware of the historical challenges that people face when they re-enroll,” said Tim Spilker, executive director of UnitedHealthcare’s Community and State unit. “We are optimistic that the scale of the outreach will help raise awareness among people of what they need to do.”