Report: For-Profit Medicaid Managed Care Plans Have Higher Admin Costs

The report, which is to be released today, indicates that publicly traded commercial Medicaid plans may not serve beneficiaries as well as those owned by providers, health systems or community health centers.

Politico Pro: Report: For-Profit Managed Care Not As Good
Commercial Medicaid managed care plans that are publicly traded may not be serving beneficiaries as well as other plans, according a report released Wednesday by the Commonwealth Fund. The report found that plans owned by publicly traded for-profit Medicaid managed care companies used 14 percent of premiums on administrative costs, while plans owned by providers, health systems or community health centers spent only 10 percent. Provider-sponsored plans had the lowest administrative cost ratio, at 8 percent (Feder, 6/15).

Modern Healthcare: Higher Administrative Costs Seen In For-Profit Medicaid Plans, Report Finds
Medicaid managed-care plans owned by publicly traded insurers have higher administrative costs than similar plans owned by providers, according to a report. For-profit publicly traded plans spent 14 percent of member premiums on administrative costs, while non-publicly traded plans owned by health systems, local providers and clinics spent 10 percent of premiums on administrative costs, according to the Commonwealth Fund (Vesely, 6/15).

In related news, reports on how specific states are handling efforts to privatize the program.

CQ HealthBeat: Connecticut Backs Away From Private Plans In Medicaid
Many in health policy say that paying fixed monthly fees per enrollee to private health plans to deliver Medicaid benefits seems like a powerful tool to manage costs. But the state of Connecticut is revamping its program to move away from such "managed care capitation." Instead, the state is relying on more of the tools provided in the health care overhaul law, such as the use of medical homes to try to deliver care more efficiently, a Connecticut state official told a Washington, D.C. health policy forum Tuesday (Reichard,6/14).

(New Orleans, La.) Times-Picayune: Gov. Bobby Jindal's Medicaid Privatization Plan Rejected By Louisiana House Panel
The Louisiana Legislature is nearing a final vote on a bill that eventually would give lawmakers the power to scrap Gov. Bobby Jindal's planned privatization of the state's Medicaid insurance program for the indigent and working poor. ... [It] faces a likely veto from Jindal, who is certain to protect one of his signature health care policy initiatives. But the proposal ... nonetheless represents legislative displeasure at the governor's seeking of an overhaul of the multibillion-dollar enterprise without lawmakers' input (Barrow, 6/14).

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