Consolidation in the insurance industry means Medicaid beneficiaries have fewer coverage options under managed care, according to a new analysis from PWC.
Following the 26% growth in Medicaid over the past two years due, in part to expansion under the Affordable Care Act, 75.2 million Americans, or 23.4% of the nation's population, are now enrolled in the Medicaid program. Of those, 73% are now in private plans; that's up from 55% in 2013.
For the first time in three years, the number of private Medicaid health plans declined in 2016, from 195 last year to 183 this year. The decline is caused by consolidation between existing plans, plans closing up shop, losing contracts, or exiting Medicaid.
Five health plans exited the market in Illinois, North Dakota, Pennsylvania and New York. In total, 16 plans were acquired or merged, including those picked up during Centene's acquisition of Health Net and multiple purchases made by Molina, which bought smaller plans in Florida, Illinois, Michigan, New York and Washington.
Of the 183 private Medicaid health plans up and running in the country, only 11 have more than 1 million members.
Seventy-six plans have fewer than 50,000 members. The remaining 151 plans have average membership of 155,000, a 12% increase from last year, reflecting the consolidation of sub-scale players.
Despite fewer options, patients may not notice much difference in terms of access to care as many states assign beneficiaries to a plan, according to report author Ari Gottlieb, a director with PWC Strategy & Health Strategy.
It can also be good news for the consumer in a smaller plan acquired by a larger player as they tend to offer more robust care, Gottlieb said.