PwC: Medicaid enrollment flat in 2017, but managed care keeps gaining steam

Ari Gottlieb presents the findings of PwC's annual report on the state of Medicaid during the Medicaid Health Plans of American conference on Tuesday.

For the first time in four years, overall enrollment in Medicaid did not grow significantly in 2017—though managed care continues to become more prevalent.

PwC’s annual report (PDF) on the state of the program—released this week to coincide with the Medicaid Health Plans of America conference—found that total enrollment in 2017 was 74.8 million. That’s just 98,000 above the enrollment total in 2016.

The reasons for that flattening growth include the fact that no new states expanded Medicaid this year, a strengthening economy, and some states’ moves to “aggressively redetermine eligibility status.”

By comparison, total enrollment was 72.9 million in 2015, 66.6 million in 2014 and 57.1 million in 2013. Thanks to that steady growth over the past five years, 23.2% of the U.S. population is now enrolled in Medicaid.

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On the state level, enrollment changes in 2017 were more varied than in years past, the report notes. Twenty-two states reported declines, while 28 states and the District of Columbia saw increases—including a 23% rise in Alaska and a 20% rise in Montana tied to the states’ decision to expand Medicaid.

Looking at the last five years, divergent enrollment trends in Nevada and Maine offer a prime example of how powerful an effect state decision-making can have on Medicaid programs.

Nevada, whose leaders embraced the Affordable Care Act, has seen its program grow by 105% since 2013. But Maine has seen its Medicaid enrollment decline by 18% since 2013. The primary reason? Maine’s anti-ACA governor Paul LePage, who has vetoed the state legislature’s attempt to expand Medicaid five times.

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Policy decisions at the national level can also have a big impact on Medicaid enrollment, the PwC report’s author, Ari Gottlieb, said during the MHPA conference. For example, the Trump administration’s ACA outreach cuts and conflicting information about whether the individual mandate will be enforced will affect more than just the individual insurance market.

Gottlieb predicted that total Medicaid enrollment might be lower next year because of those factors.

Meanwhile, the number of enrollees in private managed care plans continued its steady rise.

In 2017, 73% of Medicaid beneficiaries were in managed care plans, an increase of 1.9% year over year, or an additional 1 million Americans. In addition, 12 states now have at least 90% of their Medicaid populations covered by private plans, compared to just nine last year and four in 2013.

Over the past five years, an additional 20.9 million people were served by a managed care plan, while 3.1 million fewer were served by Medicaid fee-for-service.

But while the past year was mostly a stable one for Medicaid managed care, “the future is going to be more complicated,” Gottlieb said.

One reason is that all the talk about changing Medicaid, while not likely to result in major coverage reductions, will likely result in changes to how it’s paid for, which could prove challenging for health plans. 

Further, the trend of consolidation in the managed care industry shows no signs of abating.

That means, according to Gottlieb, that “you’re going to need more scale to participate in the Medicaid of the future.”