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March 21, 2015 01:00 AM

Medicaid insurers look for new growth opportunities

Michael Sandler
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    The Affordable Care Act's Medicaid expansion has had a positive impact on health insurers' business, but now plans are looking for other ways to grow.

    Medicaid plans experienced an initial bump of 10.8 million new enrollees in 2014 because of the healthcare reform law. But future growth among those newly eligible members in the 28 states that have approved expansion won't be as large, some experts say.

    What would lead to more growth are political decisions in the 22 non-expansion states to extend eligibility to adults with incomes up to 138% of the federal poverty level, as well as state decisions to expand the use of managed care for current beneficiaries. But Republican opposition in those 22 states makes expansion highly uncertain.

    “The story isn't expansions, one year and done,” said Jeff Myers, CEO of Medicaid Health Plans of America, a trade group.

    With the end of the big influx of new Medicaid enrollees, and with states such as Florida and Texas still doubtful on expanding eligibility, Medicaid is fragmented across the country, Myers said.

    The top 10 Medicaid managed-care insurers are active in 14 states, and most insurers operate in two states or less. Myers said there will be a trend for Medicaid plans to merge to gain efficiency.

    Meanwhile, short of an ACA Medicaid expansion, states such as North Carolina could present big opportunities for Medicaid plans, Myers said. That state's Legislature is debating implementation of a Medicaid accountable care model, but Myers predicted the state will implement a risk-based approach instead.

    Insurers themselves are looking beyond the ACA Medicaid expansion. Molina Healthcare, based in Long Beach, Calif., added 375,000 members during the initial expansion. But 25% of those people were eligible before the ACA and just didn't know it, CEO Dr. J. Mario Molina said.

    Expansion enrollment is beginning to plateau, Molina said, and his company is looking to leverage other opportunities, including launching plans beyond the 11 states in which it now operates.

    Molina will add 350,000 new members in Puerto Rico, enrolling its first members there on April 1. That move has necessitated hiring 400 new employees, and will bring an anticipated $750 million in annualized revenue for the company, whose 2014 total revenue was $9.7 billion, a 46.7% increase over 2013.

    Molina said the company also is looking to expand to other states such as New York.

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        • ESG: The Implementation Imperative Summit
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        • - Value Based Care
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        • - Future of Staffing
        • - Hospital of the Future (Fall)
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