Connecticut, beginning this past weekend, has dropped private insurers from running Medicaid plans for the state's 400,000 managed care members. Connecticut instead will assume financial responsibility for all its Medicaid recipients.
That means private insurance companies, including Aetna and UnitedHealth, are losing guaranteed income in the monthly fee Connecticut previously paid for their Medicaid coverage, reports the USA Today and Kaiser Health News.
Aetna and UnitedHealth, along with the smaller Community Health Network of Connecticut, generated more than $800 million in 2010 revenue from Connecticut's Medicaid program, eMaxHealth reports.
State officials say the insurers didn't sufficiently achieve lower costs and better care for Medicaid patients as they had promised. "Connecticut has a 15-year history with managed-care organizations, and there has been a diminishing confidence in the value of what they are providing," Connecticut Medicaid Director Mark Schaefer told USA Today.
Although Connecticut is reportedly only the second state in the past 10 years to drop its private Medicaid plans, the move could be the start of a trend. As Connecticut's decision saves the state money by eliminating the cost of private insurers' monthly fees, other states may want to realize similar savings. Plus, Connecticut now will funnel all of its Medicaid programs into one system operated by a third-party administrator while also returning to a fee-for-service model. This new comprehensive Medicaid system also includes intensive case management, which isn't possible when several private companies run the program, the Hartford Courant reports.
Aetna, however, rejected the idea that Connecticut's decision may start a trend of state Medicaid programs dropping private insurers. "We continue to see strong interest in managed Medicaid from states that are looking to meet the health needs of this vulnerable population without crippling their state budgets," Aetna spokesperson Matthew Wiggin said.
He also defended Aetna's record in Connecticut. "From the beginning, Aetna Better Health reduced the costs for providing care to Connecticut Medicaid members by 1.2 percent over the state's experience the year before," Wiggin said, adding that the insurer kept costs flat over a three-year period.