Well-known insurers could lose competitive edge in exchanges

August 2, 2013 | By Dina Overland

The big-name players in the private insurance industry shouldn’t let their guards down as they enter the homestretch before the health insurance exchanges begin open enrollment in October.

Sure, name recognition for companies like Aetna, Cigna, UnitedHealth and WellPoint could help boost their sales. But among the many unique characteristics of this new consumer group shopping for coverage through online marketplaces is that they haven’t had insurance for a long time, if ever. In other words, mainstream insurers won’t be able to easily sway some people by name alone. They don’t care if you’re the industry behemoth or a newcomer.

That’s good news for small companies, especially those specializing in Medicaid plans. Although they’ll be entering new territory by selling policies on the exchanges, Medicaid-based insurers have many advantages that will let them successfully compete with big-name commercial insurers.

“There has never been a better time to be a Medicaid health plan with the opportunities in front of us,” Lisa Rubino, president of Molina Healthcare of California, told AIS Health, including “the exchanges and the expansion of Medicaid.”

Several Medicaid insurers participating in exchanges say they’ll focus on uninsured individuals with low incomes plus the parents of children who already have Medicaid coverage. “They’re already tapped into those family units, so this is a way to bring the whole family together. [Medicaid carriers] really do see exchanges as an opportunity,” said Jeremy Palmer, a principal and consulting actuary with Milliman, AIS Health noted.

Massachusetts-based Network Health is one such Medicaid insurer forging ahead with plans to compete and vie for consumers on the exchanges despite–or perhaps because of–its smaller size.

Network Health and other Medicaid-based insurers will have some key competitive advantages like experience with a sicker population, making them better prepared for consumers shopping on exchanges who likely will have multiple chronic conditions. They also will have brand recognition among the low-income population. “They feel like their brand among the lower-income population is very strong,” Palmer said.

Plus, Medicaid insurers have leaner margins since they’re used to operating with lower profit margins. “We are very frugal in how we spend the government’s money,” Rubino said. And they have existing relationships with essential community providers as required by the reform law. “We didn’t have to go out and forge new relationships like many commercial carriers,” she said, adding that Molina maintains a culturally sensitive staff.

With the opening of exchanges this fall, the healthcare industry is ushering in an entirely new way of doing business. No longer will insurers operate primarily within the business-to-business market, where they make deals with big employers to obtain several hundred new members, for example. The online marketplaces officially introduce the business-to-consumer market, forcing insurers to reach out directly to individual people to obtain their business. The very newness of this market puts every company on even footing.

Who will become the new big players in this fresh market? Only time will tell. But I would venture to guess if a company can work hard, market to the right audience and offer competitive prices, it’s anyone’s ballgame. – Dina (@HealthPayer)

Source URL: http://www.fiercehealthpayer.com/story/medicaid-insurers-could-have-competitive-edge-exchanges/2013-08-02

ACA’s Medicaid expansion potential boon for mental health patients, providers

By Dean Olsen (dean.olsen@sj­r.com)

The State Journal Register
Posted Aug 04, 2013 @ 09:30 PM

The regular treatment for mental illness that thousands of Springfield¬area residents could receive through an expansion of Medicaid eligibility and other aspects of the Affordable Care Act would help them live better and more stable lives, mental¬health experts say.

“It will be tremendously helpful in getting them a full range of services,” said Janice Gambach, president of Mental Health Centers of Central Illinois. “They have been so disenfranchised.”

The ACA’s removal of pre¬existing conditions for almost all health¬insurance plans, as well as the law’s ban on lifetime cost limits, also will reduce the roadblocks that people with mental illness can face when seeking treatment, she said.

‘Complicated stew’
Mental illness can make it hard for people to get and keep jobs and make it more likely for them to be uninsured. So the expansion in Medicaid eligibility to anyone below 138 percent of the federal poverty level will have a huge impact, Gambach said.

It’s unclear exactly how not¬for¬profit organizations such as Springfield¬based Mental Health Centers may expand services or benefit from the potential influx of newly insured clients.

“How we will get paid is a huge moving target,” Gambach said. “It’s a complicated stew.”

Also unknown are whether the Mental Health Centers will need to increase its employment beyond 220 workers and whether it will be able to attract more potential psychiatrists, psychologists, counselors and social workers to a chronically underpaid specialty.

What is clear is that annual state spending for mental health dropped by about $101 million, or 14 percent, between fiscal 2009 and 2013, with funding standing at $681 million in fiscal 2014. The state’s mental¬health budget in fiscal 2009 was $715 million.

Mental Health Centers’ fee¬for¬service funding from the state has dropped by more than $2 million annually, or 35 percent, since 2009. The agency operates with a $13 million annual budget.

The increased funding and coverage coming through the ACA will be a boon for providers and their current and future clients, said Christine Burnett, director of strategic policy implementation at the Illinois Association of Rehabilitation Facilities.

“You can’t get around the fact that it will bring more money into the system,” she said. “It’s a ‘win¬win’ for the communities.” Lack of treatment impact

Of the 342,000 Illinoisans expected to fall within the new eligibility category and enroll in Medicaid by 2017, an estimated 5 percent will have serious mental illness, 12 percent will have experienced serious psychological distress and 15 percent will have substance¬ use disorders, according to the Illinois Department of Healthcare and Family Services.

Many of them haven’t had access to mental¬health and substance¬abuse services in the past, said Julie Hamos, Healthcare and Family Services director.

“Because of that, they have an impact on the rest of us,” she said.

A lack of mental¬health treatment can fuel crime, homelessness and unemployment, she noted.

“It affects our entire economy,” Hamos said. “This is the first Medicaid expansion since 1965 that will provide coverage to certain groups that have been excluded.”

Januari Smith, spokeswoman for the Illinois Department of Human Services, said Gov. Pat Quinn “is investing an additional $25 million for mental health services in this fiscal year, which began July 1.

Once the pension crisis is resolved, the governor plans to invest even more money in mental health. In addition, the state expects that approximately 13,000 more Illinoisans will have access to mental¬health services under the ACA.”

Mental Health Centers operates in Sangamon, Menard, Logan, Mason, Morgan and Scott counties, serving about 9,000 people a year with a variety of outpatient services.

At least 2,000 of those clients are uninsured. Their services are paid for with limited state funds and through “charity­care” funding from Mental Health Centers’ parent organization, Memorial Health System, Gambach said.8/5/13 ACA’s Medicaid expansion potential boon for mental-health patients, providers – Springfield, IL – The State Journal-Register www.sj-r.com/health/x369943955/ACAs-Medicaid-expansion-potential-boon-for-mental-health-patients-providers 2/2

New clients who begin a regular treatment regimen as a result of the ACA will benefit from the “integrated-care” model being adopted by Mental Health Centers and other mental¬health providers around the state, she said.

The model involves mental¬health professionals working with primary¬care doctors so there can be earlier intervention when patients start to show symptoms of mental illness, she said.

Integrated care also involves a more holistic focus on clients’ health, including issues such as smoking cessation and obesity, she said.

Dean Olsen can be reached at 788¬1543. Follow him at twitter.com/DeanOlsenSJR.

Link: http://www.sj-r.com/health/x369943955/ACAs-Medicaid-expansion-potential-boon-for-mental-health-patients-providers