After 2 years of extraordinary gains in Medicaid coverage due to expansion under the Affordable Care Act, coverage in the program has steadied. Private managed care covers nearly three-fourths of enrolled lives.
The fourth annual State of Medicaid report issued by PwC LLC, “The Steadying State of Medicaid in the United States,” published in September 2016, finds that the most enduring and significant impact of the Affordable Care Act is the expansion of Medicaid eligibility, which has contributed to a major expansion of health coverage for Americans. According to the report, 75.2 million Americans, nearly 1 in 4 (23.4%), are now covered by Medicaid.
The report found that after 26% growth in Medicaid over the last 2 years, and only 3 states expanding Medicaid eligibility over the past year, growth in Medicaid has moderated substantially in 2016. Medicaid has “steadied,” the report noted, with enrollment steadying after extraordinary gains of the past 2 years and private managed care penetration into the market steadied at nearly three-fourths of enrolled lives.
PwC’s analysis notes that in 2016 Medicaid still grew by 2.3 million beneficiaries (3%). In the past year, California added another 850,000 enrollees, for a total of 13.5 million residents on Medicaid, the nation’s largest Medicaid program by far. New Mexico remains the state with the greatest proportion of residents enrolled in Medicaid (36.3%), followed by the District of Columbia, and California, both with 35%. Utah has the smallest share of residents covered by Medicaid (9.2%). Montana was the state with the greatest increase in Medicaid share (5.1% of residents), followed by Alaska (4.3% of residents).
Over the past 4 years, the overall growth in Medicaid enrollment has been dramatic, the report noted, growing 31% since 2013 alone. Nine states have reported over 50% growth, with Nevada just short of doubling at 97%, Colorado 89%, Montana 82%, Kentucky 73%, and California up 71%. Only 5 states reported a smaller Medicaid enrollment over the past 4 years, and they were all modest decreases.
Private Medicaid health plans continue to grow in importance: 73% of beneficiaries are now covered by private Medicaid health plans, up from 70% in 2015 and 55% in 2013. Since 2013 private Medicaid health plans have added 20.5 million to their rolls and those in fee-for-service or public managed care has decreased 2.8 million. A number of states continued to move significant numbers of Medicaid patients to private managed care to realize cost and outcome benefits. Forty-two states have some form of private managed Medicaid.
The number of private Medicaid health plans declined in 2016 by 12. Five health plans left the market. A number of Medicaid plans acquired other health plans. And Medicaid continues to be “incredibly local,” the report noted, with 165 plans operating in only a single state and only 8 plans operating in 4 or more states and 9 operating in 2 states.
“Medicaid has reached more of a steady state,” the report concluded. The steady state of Medicaid will likely make achieving the outsized gains of the past more difficult. The most successful plans will likely be those that achieve the scale needed to invest to support existing business and the more complex business of tomorrow.
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