A promising exchange idea arrives too late

Throughout the rollout of the Affordable Care Act, few states linked insurer exchange participation to participation in managed Medicaid.

It sounds like a simple idea, but one that has not garnered much attention until New York adopted it.

New York Gov. Andrew Cuomo ordered the Department of Health to bar insurers that quit exchanges from participating in Medicaid, the Children’s Health Plan, and New York’s Essential Plan. As in most states, managed Medicaid represents a huge book of business, and not one that insurers are eager to lose.

However, instituting such measures are mostly unnecessary and more of a preemptive strike against whatever health reform manifests in the U.S. Senate. New York State of Health’s competition is healthy; every county has at least two insurers selling plans, and the metro areas have healthier competition.

Linking Medicaid MCO participation to the exchanges would be more beneficial in states where market retreats have been felt more acutely, like Arizona, which tumbled from more than a dozen insurers in 2014 to just two in 2017. Arizona’s Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS, pronounced “Access”), is a model for managed Medicaid, and its MCO contractors include a laundry list of former exchange participants. However, Arizona lawmakers have been staunch ACA opponents, eliminating the possibility of linking AHCCCS to the state’s exchange.

Despite all the attention on Cuomo’s decision, New York is not the first state to pursue this move. Nevada quietly linked its exchanges and managed Medicaid years ago.

Until now, exchange innovations that have gone on in Nevada have stayed in Nevada.

Nevada’s health exchange has never been a hotbed of competition—not in a state of 2.8 million people with its population centered on Las Vegas (2 million Nevadans live there). It has wavered between four and five competitors through its exchange’s four open enrollments.

However, it is among the few exchanges that can boast UnitedHealthcare’s continuous participation. That is not only due to Medicaid participation, but UnitedHealth’s ownership of Las Vegas-based Health Plan of Nevada and its vertically integrated multispecialty practice, Southwest Medical Associates. Still, when UnitedHealth officials say the company’s views on exchanges have not changed, it goes unmentioned that their withdrawal from three dozen states did not include Nevada.

The Affordable Care Act’s Medicaid expansion added more than 200,000 people to Nevada’s Medicaid rolls. The state indicated early that it would add more MCOs when it recontracted in 2016, and priority consideration would be given to insurers that agreed to join the exchange.

Nevada selected Centene and Aetna to join its two incumbent plans, Anthem and UnitedHealth. Aetna has not confirmed any Nevada exchange participation, but Centene is in. Centene stands alone among the nation’s largest for-profit insurers and has signalled no retreat from the business.

With Senate Republicans nearing completion on their own version of an Affordable Care Act repeal, these changes could all be moot.

But it’s a notion that could have prevented the nosedive in competition that many exchanges underwent in the past few years.

 

To hear more on the evolving healthcare environment, attend our upcoming webinar on June 27, titled “The Politics of U.S. Healthcare – Exchanges in the Trump Era.” Registration is available here: http://ift.tt/2od2kF2.

 

This blog is part of a series of posts from DRG regarding the impact of the 2016 election on U.S. healthcare. See our other blogs as they are added here: http://ift.tt/2mruHyT.

 

For more on the exchanges and healthcare, follow Bill Melville @BillMelvilleDRG

 

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