With Medicaid enrollment growing nationally and in Pennsylvania, the federal government is proposing new oversight of privately administered Medicaid plans, tightening profit guidelines for insurers and keeping a closer eye on doctor availability for patients.
Participation in Medicaid, the state-run health insurance plan for the poor and disabled, has grown by about 10 million in the U.S. over the last 18 months, an increase driven by federal subsidies and the broad income-based eligibility expansion included in the 2010 Affordable Care Act.
While several states expanded their Medicaid programs at the beginning of 2014, Pennsylvania and former Republican Gov. Tom Corbett waited until 2015 to do so. Pennsylvania’s Medicaid population now stands at about 2.46 million as of March, or more than 19 percent of the state’s population.
Of those, more than 256,000 people are newly eligible this year because of the ACA expansion, said Kait Gillis, a spokeswoman for the Pennsylvania Department of Human Services.
That number figures to grow as newly eligible Pennsylvanians — the working poor who don’t have a particular disability or vulnerable condition, but who make less than 138 percent of the federal poverty threshold — continue to enroll throughout the year.
The growth in Medicaid — and, specifically, Medicaid managed care programs — is one of the reasons that the Centers for Medicare and Medicaid Services and the U.S. Department of Health and Human Services proposed the new rules. While some states still offer Medicaid coverage fully administered by the state government, most — including Pennsylvania — have outsourced much of the job of health plan maintenance to private companies.
In Pennsylvania, Gateway, Aetna, UPMC Health Plan and several others offer Medicaid managed care plans, representing about 80 percent of Pennsylvania’s total Medicaid enrollment.
The proposed regulations, issued Tuesday, represent the first major update to federal Medicaid guidelines since 2002.
“This is huge. This is going to affect millions of people,” said Sarah Somers, managing attorney with the National Health Law Program, a health rights and advocacy group for lower income households. “They want to improve the beneficiary experience.”
CMS also wants to reduce some of the variation in that experience. While Medicare plans — federally operated and subsidized health policies for senior citizens — are more tightly regulated, and more uniform from state to state, Medicaid plans and the benefits included in them vary dramatically.
Even if the benefits packages aren’t exactly identical, the new guidelines will bring the plans into closer alignment “with the private insurance market,” according to the preamble to the guidelines.
The changes, which are still subject to public review and final approval, would create new profit guidelines for plans — 85 cents on every dollar collected must be spent on health benefits, or else an insurer’s future rate increases might be challenged by state insurance overseers.
Medicaid can be a budget drain for states, but it can be profitable for private companies that run the plans: UnitedHealthcare, Anthem, Aetna and others generated aggregate operating profits of $2.4 billion last year on Medicaid plans, according to data compiled by Mark Farrah Associates of Maine.
The new rules would also shape standards for provider networks built into the Medicaid plans.
A 2014 report from the U.S. Office of the Inspector General found that a substantial percentage of doctors who are supposed to see Medicaid patients are unable or unavailable to do so.
That’s troubling, because Medicaid enrollees are supposed to select their doctors from a list of providers connected to each Medicaid managed care plan.
“Network adequacy, we think that’s really, really important,” said Erin Ninehouser of the Pennsylvania Health Access Network, another advocacy group.
Part of that equation is making sure people have broad access close to home. The network also wants to see beefed up access guarantees for dependency and mental health counseling, Ms. Ninehouser said.
Narrow networks, she said, ought not be so narrow that beneficiaries can’t access their physicians and specialists.
“We welcome any attempts to upgrade and modernize Medicaid,” said Paula Yurkovich, marketing director of Pittsburgh-base Gateway Health, which sells Medicaid plans in Pennsylvania. Gateway, Ms. Yurkovich said, had not yet reviewed the 653-page proposal and couldn’t comment on its suggested revisions.
Bill Toland: btoland@post-gazette.com or 412-263-2625.
First Published: May 29, 2015, 4:00 a.m.
