Enrollment in Managed Medicaid Plans Increases Significantly

According to a recent analysis by Mark Farrah Associates, enrollment in Medicaid programs provided through managed care organizations (MCOs) increased significantly between June 2015 and June 2016.

“Health plans nationwide continue to experience increased pressure to redefine their approach in search of growth,” the investigators wrote. “From 2015 to 2016, growth was most significant in the managed Medicaid segment as 3.5 million more members joined state-subsidized plans.”

In order to provide key findings from the latest year-over-year health insurance enrollment data, the investigators compared segment membership data from the second quarter of 2015 to segment membership data from the second quarter of 2016. They found that overall trends suggest a continued decline in insurance services in the individual non-group segment and employer group risk segment. They noted that these declines are likely reflective of the impact from the Affordable Care Act.

However, study results showed strong growth in the managed Medicaid, Medicare Advantage, and the administrative services only segments.  Enrollment in insurer-managed Medicaid plans carried by MCOs increased by 9%, to 48.3 million. The investigators noted that this increase was down from last year’s increase of 23%. 

The investigators also found that participation in Medicare Advantage plans increased modestly from 17.4 million in 2015 to 18 million in 2016.

In their conclusion, the investigators noted that growth in the managed Medicaid segment, as well as other health care segments, could be negatively impacted by health insurance mergers.

“In addition, health insurance merger and acquisition activity could potentially create a significant impact on health plan competition,” they wrote. “On one hand, an influx of health plan consolidation could provide opportunities for increased efficiencies, lower costs, increased innovation, and a higher quality of care. However, mega mergers such as Anthem with Cigna and Humana with Aetna could make it difficult for the potential of new entrants or for smaller companies to survive on their own. If regulators approve these mergers, the competitive landscape will be altered segment by segment.” —David Costill