Report: 20% enrollment boost for Medicaid plans

Private insurers could see a 20 percent growth in enrollment this year, since many states are using the private option to expand Medicaid and more consumers overall are signing up for Medicaid under the reform law, according to a new analysis from Avalere Health.

And that growth will continue in the next few years; Avalere predicts a 38 percent increase in Medicaid managed care enrollment between 2013 and 2016.

"The continuing shift toward Medicaid managed care presents a significant growth opportunity for health plans that specialize in managing these low-income populations," Avalere Executive Vice President Matt Eyles said. "Plans that currently operate in Medicaid could see significant membership growth, and those outside of the Medicaid market until now could gain market share by moving into this space."

Currently, 38 states contract with private insurers to provide some or all coverage for Medicaid beneficiaries. Among the 26 states that have committed to expanding Medicaid under the reform law, only three don't use private insurers. What's more, several states, including Missouri and Utah, are considering implementing a private Medicaid option, FierceHealthPayer and FierceHealthFinance previously reported, respectively.

Therefore, Avalere predicts 75 percent of consumers newly eligible for Medicaid will enroll in a private plan by 2015--an increase from 63 percent in 2012.

"We are seeing states such as California, Florida and Texas that have long enrolled beneficiaries in managed care, now moving toward statewide [managed care organization] expansions," Avalere Vice President Caroline Pearson said. "These changes will expand Medicaid plans' coverage into more rural geographies and will essentially end fee-for-service Medicaid in some states."

To learn more:
- read the Avalere Health analysis