Conning Research: Medicaid Managed Care Expansion Presents Opportunity to Health Plans that Are Prepared

--Careful state-level analysis needed

Dec 13, 2010, 09:00 ET from Conning Research & Consulting

HARTFORD, Conn., Dec. 13, 2010 /PRNewswire/ -- With the passage of the Patient Protection and Affordable Care Act, states will be adding at least 16 million new Medicaid enrollees from 2014 through 2019 through either a managed care or fee-for-service plan. Even before this expansion, Medicaid will likely continue to expand as individuals turn to Medicaid health insurance coverage due to the continued economic downturn, according to a new study by Conning Research & Consulting.

"Health plans should consider several elements in evaluating individual states for potential Medicaid market opportunities," said Terence Martin, analyst with Conning. "Government funding and reimbursement levels, a state's experience with managed care, current operating margins for managed Medicaid plans in the states, the number and type of Medicaid enrollees in each state, and competition are all critical factors. Competition in a state market may come from major Medicaid managed care players, from multi-line managed care plans, from hospital-based plans, and from clinic-centered managed care."

The Conning Research study, "Medicaid Managed Care: Opportunities from Expansion of the Safety Net" reviews the evolution and current state of Medicaid Managed Care and the impact of federal funding and state actions. The study further analyzes the geographic regions which will gain the largest number of newly eligible enrollees when Medicaid expands beginning in 2014, and those states that may be appropriate targets for health insurers to consider for expansion.

"The expansion of Medicaid programs presents an opportunity for health plans to capture part of the resulting enrollment growth," said Stephan Christiansen, director of research at Conning. "Certainly, the opportunity is not without some risk. Current Medicaid Managed Care premiums per member are less than average commercial coverage premiums. But the new population may have unpredictable cost characteristics."

"Medicaid Managed Care: Opportunities from Expansion of the Safety Net" is available for purchase from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company's web site at www.conningresearch.com.

About Conning Research & Consulting

Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers.  Conning Research has published independent insurance industry research for 50 years, including market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth analyses on a wide range of industry products and issues. Conning is headquartered in Hartford, CT.

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