Private health plans could take the lead in alerting individuals of their insurance options once Medicaid redeterminations begin, raising concerns among patient advocates about the impact on payer competition and patients.
As part of the pandemic relief effort, states paused removing people from Medicaid during the public health crisis because they are no longer qualified. As a result, and also because of an influx of enrollees due to the unprecedented, rapid loss of employment during the pandemic, Medicaid enrollment has swelled to its highest level ever.
Once the Biden administration ends the federal emergency period, states will have 12 months to review the eligibility information of the nearly 78 million people enrolled in the public health program. The public health emergency is scheduled to end on April 16, although the Biden administration is expected to extend it for at least another 90 days.
Up to 16 million people could lose Medicaid coverage, according to the Urban Institute. And only half of states have a plan for how to reassess individuals' Medicaid eligibility at the end of the emergency, according to a Kaiser Family Foundation survey published earlier this month.
A lack of coordination, outdated technology systems, staffing constraints and the politically fraught nature of Medicaid will leave private insurers and Affordable Care Act marketplaces to do the heavy lifting to ensure Medicaid members maintain continuity of coverage, said Heather Korbulic, the former executive director of the Nevada Health Insurance Exchange who joined GetInsured in February as the IT platform's senior policy and strategy lead.
"Medicaid doesn't usually, and has not historically, invested time and energy and resources into marketing and outreach," she said. "What will happen is inevitably a lot of that outreach, and marketing, will come from state exchanges and from managed care organizations."
Korbulic added: "Nobody's more incentivized than an insurance carrier right now."
Insurers expand ACA, employment coverage
Many of those individuals who no longer will qualify for Medicaid will turn to ACA exchanges for health insurance, with about a third of people qualifying for subsidies, the Urban Institute report said. The other 65% of adults will qualify for insurance through their job, according to the report.
Large Medicaid insurers have spent the last year expanding their ACA footprint and making their offerings more attractive to employers, in part to attract people no longer eligible for Medicaid.
Centene–the largest Medicaid carrier in the nation with 15 million enrollees–expanded its exchange footprint to five additional states at the start of the year, making its Ambetter ACA plans available in 25 of its 29 Medicaid states. The insurer has built a platform between its exchange plans and Medicaid, Chief Operating Officer Brett Layton said during the company's fourth-quarter earnings call.
"Whether it's network or communication or planning, we're preparing for this," he said.
Anthem, the nation's second-largest Medicaid insurer with 10.6 million enrollees, spent the last year acquiring local Medicaid plans and expects enrollees no longer eligible for the public health program to create a financial "tailwind" for the insurer when they transfer to ACA products or employer-sponsored plans, John Gallina, chief financial officer, said during the insurer's 2021 third-quarter earnings call. Of the individuals who will no longer be eligible, Anthem expects 20% to be eligible for subsidized coverage on the ACA exchange and 45% to receive insurance through their employer.
"We offer a product for every American in every situation," Gallina said on the call. "Young, old, rich, poor, sick, healthy we have a product for all of them. Right now there is a significant number of members within our Medicaid plans. After redetermination occurs Medicaid may shrink a little bit, but that means that there is really some significant growth opportunities in other lines of business."
The insurer recently announced a plan to change its name to Elevance Health, with analysts at the time saying it was a way to grow its stalled employer business. The number of lives Anthem managed through its commercial business grew 0.8% year-over-year to 30.3 million individuals in 2021.
Centene and Anthem did not make executives available for interviews about how they are preparing for redeterminations.
At the start of the year, AmeriHealth Caritas also invested in the ACA: The insurer entered the exchange market, launching an ACA product modeled after its Medicaid offerings. AmeriHealth is engaging its provider, homeless shelter and church partners to help its 2.5 million Medicaid enrollees understand the redetermination process, said Courtnay Thompson, South Carolina market president.
"It's really important for us to understand who those numbers are in advance, because then we can help partner with the state," Thompson said.
Highmark Health, meanwhile, counts approximately 500,000 Medicaid enrollees across three states, and expects up to 75,000 members to fall off of its rolls once redeterminations begin, said Karen Hanlon, executive vice president and chief operating officer. The integrated health system expects a "negligible" portion to translate to ACA coverage, with most transitioning to health plans sponsored by their employer, Hanlon said.
"It all depends on what you think has happened with the job market," she said.
Competition, patient cherry-picking concerns
Since the KFF study was published, more states–including Texas, which has the highest uninsured rate in the nation–have announced plans for how they will conduct redeterminations. The Centers for Medicare and Medicaid Services at the end of March issued a number of strategies states can use to guide the process.
Still, each state runs its own program. How much time, effort and money state Medicaid departments will devote to this work is their choice.
Some states have started mailing out renewal notices to members and updating their technology systems for assessing member eligibility, said Jack Rollins, director of federal policy at the National Association of State Medicaid Directors.
"Not every state has necessarily stopped conducting redeterminations and doing notices and outreach to members during this time period," Rollins said. "It's not that we're necessarily starting from scratch."
States that operate their own ACA exchanges will have an easier time processing redeterminations than those that operate on the federal Healthcare.gov marketplace since they are often tightly integrated with local Medicaid departments, said GetInsured's Korbulic.
"We've haven't really heard a lot from Healthcare.gov on what exactly they are going to do to respond to that massive amount of work that will be coming," she said.
CMS did not directly answer questions about how it planned to handle an influx of account transfers. The agency regularly tests its systems to ensure they can support consumer traffic, a spokesperson wrote in an email.
Some states have invested in their own ACA marketplaces with the end of the public health emergency in mind.
New Mexico–which has the highest proportion of residents on Medicaid in the nation–announced plans to launch its own ACA exchange last year, and told insurers that provide Medicaid managed-care plans that they must offer ACA plans to make it easy for people to switch over, Korbulic said. Officials from New Mexico's ACA exchange, named BeWellNM, did not respond to an interview request.
But not everyone thinks that insurers offering both plans is positive.
Insurance commissioners are worried that health plans that offer both marketplace and Medicaid products will have a competitive advantage over carriers that offer only one product, tilting the marketplace in favor of larger, legacy insurers, said Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University.
Insurers with existing Medicaid contracts also already have information on patients' health and could steer those with more costly medical conditions to competitors' ACA plans while marketing their products to more healthy members, Corlette said. One solution would be to mandate that insurers offer the same marketing and communications to every enrollee, she said.
Targeting messages to individual members will be critical for bridging gaps in equity, countered Anna Dunbar-Hester, senior advisor for Medicaid policy at insurance lobbying group AHIP.
"We would love guidelines and messaging guides, but not something where every single targeted message has to go through a lengthy process of state review and approval, especially given state staffing constraints," Dunbar-Hester said. "We don't want something to be stuck in a pipeline for three months."
Insurers are generally wary of adding members through special enrollment periods since individuals with more serious, costly health conditions can be more likely to sign up for coverage, Corlette said. Because of the threat of adverse selection, Corlette questioned how much private insurers will invest in marketing at the end of the public health emergency.
"Insurance companies don't like the morbidity profile of people who come in during special enrollment periods, and so they don't pay brokers to assist people with special enrollment," Corlette said. "But post-PHE is when you want your broker workforce to have the incentive to go out there and beat the drums to get people to enroll."