Benefit Bulletin: July 2015

Benefit Bulletin: July 2015

Patients Saying “No Thank You” To Medicare/Medicaid Managed Care

Last fall Susan Gross of Barboursville, Virginia, received notification that her disabled son Andrew, who was born with cerebral palsy and is now age 42, had been automatically enrolled in a new, Medicare/Medicaid HMO. After contacting her neighbor, TSCL’s Medicare policy analyst, Mary Johnson, Gross learned that the plan did not cover her son’s expensive brand name drug that he needed to take six times a day to control seizures. The cost of that prescription alone is about $3,456 a year — something a Medicaid patient like Andrew and his family could ill afford. In addition, Johnson was unable to confirm if Andrew would be able to continue to see his regular doctors under the new plan because of discrepancies in posted health plan provider information — and what the doctors and hospitals themselves were reporting. Gross decided to opt out of the new HMO for Andrew, since disruptions to his care would have serious consequences.

Andrew’s situation is not unique, and now both health insurers and state officials are expressing concerns that the demonstration projects in 11 states may not yield the costs savings that the Obama Administration has hoped for. They say that because the program is optional, many Medicare/Medicaid patients are deciding to opt out. In Virginia only 42 percent of those estimated to be eligible for the program have remained enrolled. About 40 percent across the state have opted out. TSCL believes that’s a good indication of the strength of concerns about disruptions to care and coverage under the plans.

Under the demonstrations, participating state Medicaid programs enroll some of the lowest-income and most vulnerable Medicare and Medicaid patients into private managed care plans. The plans are required to provide all covered services in return for fixed payments from the federal government. While that helps make government budgets more predictable, it sets up a conflict of interest, because the less care these private companies deliver, the more money they make. According to data analyzed by Kaiser Health News, nationwide such firms had operating profits of $2.4 billion last year.

TSCL remains concerned that the payment model which provides a set amount of money to plans for care and savings targets may be unrealistic, and both CMS and health plans need to have more reliable listings of health plan providers. TSCL is relaying these and other concerns in meetings with Members of Congress. If you or someone you know has questions about Medicare/Medicaid plans we strongly recommend that you contact your State Health Insurance Assistance Program (SHIP) for free one-on-one counseling.

Sources: “Disruptions Mount As Illinois Shifts Medicaid Patients To Managed Care,” Wes Venteicher, Chicago Tribune, February 10, 2015. “Few Dual-Eligibles Opt For Coordinated Care,” Virgil Dickson, Modern Healthcare, July 26, 2014. “Health Insurers Hunt For Dual Eligibles,” Virgil Dickson, Modern Healthcare, November 26, 2014. “Early Insights from Commonwealth Coordinated Care,” Kaiser Family Foundation, June 2015.