Humana partners with Medicaid plan for dual-eligible coverage

Humana said Tuesday that it has formed a "strategic alliance" with a Medicaid insurer to create a health plan that coordinates coverage for the $300 billion dual-eligible market.

The insurer already is a major provider of Medicare plans; however, it lacks a strong presence in the burgeoning Medicaid market. By aligning itself with CareSource, a non-profit health plan with 900,000 Medicaid members in Ohio and Michigan, Humana will increase its Medicaid market share while also growing its dual-eligible members who qualify for both Medicare and Medicaid, Fox Business reported.

"Without integration, it is a challenge to manage and coordinate the care of beneficiaries enrolled in both Medicare and Medicaid," Humana CEO Michael McCallister said.

Although the companies didn't disclose financial terms, they said their new alliance will involve some risk-sharing, Reuters reported. Humana and CareSource also agreed to work exclusively in states where they offer coordinated health plans, according to the Associated Press.

"This alliance positions Humana reasonably well" in CareSource-dominant Ohio and Michigan, where state governments are working to establish coordinated plans for Medicare and Medicaid. Plus, it's "almost certainly a less expensive method" than buying a Medicaid plan outright, Wells Fargo Analyst Peter Costa told Fox Business.  

Meanwhile, Aetna's chief financial officer said the insurer doesn't need acquisitions to win dual-eligible patients' business. "I do believe we'll have the platforms built to be able to respond to this opportunity," Joseph Zubretsky told The Wall Street Journal. Although the dual-eligible market is ripe with potential, it will take several years to build, giving Aetna time to grow its dual-eligible business from within, he added.

To learn more:
- read the Fox Business article
- see the Reuters article
- check out the Associated Press article
- read the Wall Street Journal article (subscription required)