Medicaid plans' business model succeeds where others struggle

By Annette Boyle

The success of smaller insurers with extensive Medicaid experience may offer a model that could stabilize the Affordable Care Act marketplace exchanges, according to Roll Call.

Companies such as Centene Corp. and Molina Healthcare--which have been succesful in the Medicaid managed care space--continue to outperform larger insurers on the exchanges, leading them to consider expanding. In contrast, UnitedHealth has pulled out of at least 27 states and Humana is weighing more limited participation on exchanges. 

The low premiums of Medicaid-style plans appeal to many consumers, according to the article. While some consumers have complained about their limited access to doctors and hospitals, others say they don't mind the combination of lower premiums and narrow networks.

Molina and Centene plans may attract fewer sick patients because of their more limited access, Katherine Hempstead, a senior adviser at the Robert Wood Johnson Foundation, tells Roll Call. The Blue Cross and Blue Shield Association, meanwhile, has said its member plans' exchange customers were sicker and more expensive than expected.

Medicaid-style plans have also developed strategies to reduce the cost of care, the article notes. They typically charge higher copays for emergency department visits than other plans and have lower copays for primary care visits. What's more, companies such as Centene and Molina also have more leverage with providers, which are used to paying rock-bottom rates for their Medicaid plans.

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- here's the article