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The most enduring and significant impact of the Affordable Care Act may be the most under-reported and under-discussed - the expansion of Medicaid eligibility, which has contributed to a major expansion of health coverage for Americans. 75 million individuals are now covered by Medicaid - nearly one in four Americans, while in 2013 only 59 million were covered, meaning one in 17 citizens have been added to Medicaid programs."  Ari Gottlieb, Director, Health Services & Payer Strategy, PwC Strategy&


The State of Managed Medicaid and Medicare

What's going on in Managed Medicaid and Medicare as we start looking into 2017? This week, Ari Gottlieb at PwC's Strategy& released their fourth annual Medicaid report, a 14-page paper on the current state of Medicaid, which is dominated by Medicaid managed care plans.

Their stated motive for the report is that "despite the significance of the Medicaid market, detail on the composition of the market, growth drivers, and trends is often elusive relative to other health programs. This analysis... aims to fill that gap by providing an in-depth view of the Medicaid market, including private Medicaid health plans, detailing the continuing impact of Medicaid expansion, and positing considerations for Medicaid health plans and organizations involved in Medicaid markets going forward, powered by the proprietary collection and analysis of state Medicaid data."

The Steadying State of Medicaid in the United States

Here are tidbits from the report:

"In 2016 Medicaid still posted overall growth of 2.3 million beneficiaries, or 3%. This translates to 75.2 million Americans being covered by a physical health Medicaid program, or 23.4% of the nation's population.
In the past year, California added yet another 850,000 enrollees, for a total of 13.5 million residents on Medicaid - clearly the nation's largest Medicaid program by far. Over the past four years, California has added a staggering 5.6 million beneficiaries to Medicaid."

After California, rounding out the top five states with the largest enrollment are New York 6.1M; Texas 4.4M; Florida 3.9M; and Illinois 3.1M. In terms of the largest Medicaid percentage of the total population, the top five states are New Mexico 36.3%; DC 35.2%; California 34.6%; Arkansas 32.8% and Kentucky 31.4% The smallest share goes to Utah with 9.2%

"73% of beneficiaries are now covered by private Medicaid health plans, up from 70% last year, and 55% in 2013. 54.7 million Americans are covered by private Medicaid health plans, an increase of 60% from 2013. Over the past year, private plans added 3.4 million beneficiaries, while the number of beneficiaries enrolled in fee-for-service or public managed care decreased by 800,000. Since 2013, private Medicaid health plans have added 20.5 million to their rolls, while those in fee-for-service or public managed care has decreased 2.8 million."

Five states now have 95% or more Medicaid enrollees in managed care plans (TN, HI, NH, IA, NJ) while four states are under 30% (ID, AR, ND, MT)

"Medicaid continues to be incredibly local. 165 plans this year operate in only a single state (90%, unchanged from last year). Only nine plans operate in four or more states, with an additional nine operating in two states.
With Health Net's acquisition by Centene, the number of plans with greater than 1 million members declined to 11 from 12. 76 plans have fewer than 50,000 members (including 21 managed long-term care plans with an average membership of 6,100). Excluding the 11 plans over 1 million and the managed long-term care plan, the remaining 151 plans have average membership of 155,000, a 12% increase from last year, reflecting the consolidation of sub-scale players.

On the Medicare Advantage front, CMS last week released the following MA premium and enrollment information for 2017:
  - MA monthly premium will decrease by $1.19 (4%) in 2017, from $32.59 on average in 2016 to $31.40
  - This would be 13 percent lower than the average Medicare Advantage premium prior to ACA passage
  - 67%  of Medicare Advantage enrollees will experience no premium increase.
  - 99 percent of Medicare beneficiaries having access to a Medicare Advantage plan.
  - MA Enrollment is projected to increase to 18.5 million enrollees next year, a 60% increase from 2010.
  - In 2017, 32% of all Medicare enrollees will be in a Medicare Advantage plan compared to  24% in 2010.

Meanwhile, on the operations side of things for MA plans, Sherlock Company this week released the following benchmark information from their 2016 Medicare plan edition of the Sherlock Expense Evaluation Report (SEER). This benchmarking study analyzes in-depth surveys of ten Medicare focused plans serving 3.7 million members, of which 673,000 are Medicare Advantage or Medicare SNP members

Sherlock found that:
  - The administrative expenses of Medicare focused plans decreased at a median rate 3.2% per member, less dramatically than last year's decrease of 6.7%.
   - Account and Membership Administration costs accelerated to a 6.6% increase, up from a 5.3% decrease last year, chiefly due to a surge in Information Systems expense growth.
  - Medical and Provider Management costs declined, owing chiefly to reductions in Medical Management costs.
  - Sales and Marketing and Corporate Services costs declined. The median total cost was $44.72 per member per month (PMPM), higher than the prior year's $42.02 PMPM.

For More Information:

The Steadying State of Medicaid in the United States
PwC, September 2016

Medicare Plans Continue Cost Decline but Information Systems Costs Accelerate
Sherlock Company, September 26, 2016

Medicare Advantage premiums remain stable in 2017; beneficiaries have saved over $23.5 billion on prescription drugs
CMS, September 22, 2016

Prescription Drug Costs on the Public's Mind - Reductions in the Uninsured Not So Much
By Clive Riddle, September 30, 2016

The just released current Kaiser Family Foundation Tracking Poll finds that while the public continues to be deeply divided on the Affordable Care Act, they are fairly united in backing policy changes to rein in prescription drug costs...................................................
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Weekly News

1. The Need To Replace EpiPens Regularly Adds To Concerns About Cost
Kaiser Health News reports: As controversy about the pricing of EpiPens reverberates from Capitol Hill to school districts across the country, one recurring complaint from consumers is that the high cost is magnified because the drug expires quickly, forcing users to regularly bear the cost of replacing the medicine that saves lives in the event of a severe allergic reaction.
Kaiser Health News, September 30, 2016


2. UnitedHealth And University Of California To Forge Unique Alliance
Kaiser Health News reports: The nation's largest health insurer and the University of California Health system are joining forces to create a new health plan option for employers and expand research into patient data.
Kaiser Health News, September 29, 2016


3. U.S. Paid Insurers Funds Meant for Treasury, Auditors Say
The New York Times reports: Federal auditors ruled on Thursday that the Obama administration had violated the law by paying health insurance companies more than allowed under the Affordable Care Act in an effort to hold down insurance premiums.
The New York Times, September 29, 2016


4. Medicaid Expansion Will Drive Affordability, Insurance Leader Says
Bloomberg BNA reports: Medicaid expansion will force the U.S. to address the cost of health care, health insurance trade association chief Marilyn Tavenner said.
Bloomberg BNA, September 29, 2016


5. Don't get too excited over smart rooms just so fast
Healthcare Dive reports: Imagine a hospital room that can track patient movements, alert nurses that a patient identified as a fall risk has left the bed, and provide clinicians with relevant, real-time patient information such as vital signs, test results and medications that are due.
Healthcare Dive, September 29, 2016


6. Not-for-profit hospitals improved performance in 2015 but it won't last: Fitch Ratings
Modern Healthcare reports: Operating performance last year improved across the board for not-for-profit hospitals in the U.S. but that trend is not expected to continue this year, according to a Fitch Ratings analysis.
Modern Healthcare, September 29, 20167.


7. Low morale plagues U.S. physicians
Benefits Pro reports: The changes sweeping through the medical profession have strewn collateral damage widely among those who labor in the field.
Benefits Pro, September 28, 2016


8. ACA enrollment campaign pulling out all stops to get millennials
Healthcare Dive reports: CMS announced Monday multiple initiatives it is launching to reach out to young adults during the upcoming ACA open enrollment period.
Healthcare Dive, September 28, 2016


9. Expert Panel Recommends Expansion Of Services With No Cost Sharing For Women
Kaiser Health News reports: The list of preventive services that women can receive without paying anything out of pocket under the health law could grow if proposed recommendations by a group of mostly medical providers are adopted by federal officials later this year.
Kaiser Health News, September 27, 2016


10. Executive pay at Health Care Service Corp. rises despite ACA troubles
Modern Healthcare reports: Salaries and bonuses were up across the board last year for top leaders at Health Care Service Corp., the Blue Cross and Blue Shield insurer in five states.
Modern Healthcare, September 26, 2016


11. Pfizer Opts Not to Split, Putting Focus on M&A and New Drugs
Bloomberg reports: Pfizer Inc. decided not to split in two separate companies, opting against what could have been one of the biggest breakups in the drug industry's history after years of what it called an "extensive evaluation."
Bloomberg, September 26, 2016


12. Medical Record Mix-Ups a Common Problem, Study Finds
The Wall Street Journal reports: A patient in cardiac arrest was mistakenly not resuscitated because clinicians confused him with a patient who had a do-not-resuscitate order on file.
Wall Street Journal, September 26, 2016


13. Why Do Obese Patients Get Worse Care? Many Doctors Don't See Past the Fat
The New York Times reports: You must lose weight, a doctor told Sarah Bramblette, advising a 1,200-calorie-a-day diet. But Ms. Bramblette had a basic question: How much do I weigh?
New York Times, September 26, 2016


14. The Revolution in EMS Care
The Wall Street Journal reports: There's a revolution taking place in emergency medical services, and for many, it could be life changing.
Wall Street Journal, September 25, 2016


15. Only 11 Medicaid managed-care plans have more than 1 million members
Modern Healthcare reports: Consolidation in the insurance industry means Medicaid beneficiaries have fewer coverage options under managed care, according to a new analysis from PWC.
Modern Healthcare, September 23, 2016

 HealthcareWebSummit Events

Upcoming Webinars:

Trends in Provider Sponsored Health Plans, October 5, 2016
Building blocks for Population Health: The health system perspective, October 20, 2016
2016 Predictive Modeling Web Summit, November 10, 2016

2016 Accountable Care Web Summit , December 14, 2016

Check out Post-Event Materials from past HealthcareWebSummit events on a wide range of key topics at

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