Wednesday, April 23, 2014

Insurers React As Avalere Finds Newly Eligible Medicaid Beneficiaries In Poorer Health

Posted: August 8, 2011

A new Avalere Health analysis has found that people who are newly eligible for Medicaid under the health reform law report poorer health than Medicaid's current enrollees, suggesting Medicaid health plans need to prepare for increased rolls of these types of patients when Medicaid is expanded in 2014, the health care advisory company said. Avalere's analysis comes as sources wait for HHS to release a set of draft regulations on the Medicaid eligibility expansion, and is bolstering calls for inclusion of preventive services in CMS' upcoming essential health benefits package.

Dan Mendelson, CEO of Avalere Health, said that Avalere's findings support the need for basic preventive care in the essential benefits package, which is expected to be released late this year. "That's how you get on top of these self-reported health status issues," he said. The newly eligible population tends to be under-diagnosed and there is not as much available to them in terms of diagnosis and treatment of illness, he told Inside Health Policy. Lack of access to primary care is one of the larger issues and presumably when the low-income uninsured have access to basic preventive care the trend will be reversed, he said.

In response to the findings, Medicaid Health Plans of America President and CEO Thomas Johnson said, "Our member health plans are aware of the issue and have been preparing for it. They've modeled the profile of this special population and the Avalere estimates seem consistent with what they have been seeing in their calculations. Truly the expansion is reaching those who are most in need of access to quality healthcare."

America's Health Insurance Plans' spokesperson Robert Zirkelbach said the data underscore the need for innovative services. "The data highlight the need for the types of innovative services Medicaid health plans provide to coordinate care for patients with multiple health conditions, help patients manage disease, and incentivize prevention and early intervention. These initiatives have a track record of success and can improve patient care while helping to control rising health care costs."

The health reform law requires states to provide most newly eligible Medicaid beneficiaries with benchmark or benchmark-equivalent coverage. Those types of coverage must include essential health benefits. The proposed rule on the Medicaid eligibility expansion under the health reform law has been under review at the Office of Management and Budget since late June.

Avalere concluded that roughly 61 percent of current Medicaid enrollees reported excellent or very good health, compared with 51 percent of the low-income uninsured. While low-income uninsured people -- identified as having income below 133 percent of the federal poverty level -- experience chronic common illnesses at similar rates as current Medicaid beneficiaries, the firm said illness among the uninsured is likely to be under-diagnosed.

Avalere analyzed the 2008 Medical Expenditure Panel Survey, which is a set of large-scale surveys and individuals, providers and employers across the country. HHS' Agency for Healthcare Research and Quality says MEPS collects data on specific health services people use, how frequently they use them, the cost of those services and how they are paid for, among other things. The data is self-reported and Avalere's analysis was self-funded, Mendelson said.

Other studies have also used MEPS data to estimate the health statuses for the newly eligible Medicaid beneficiaries -- Urban Institute did such an analysis last year looking at MEPS data from 2005 and 2006, but that study concluded that new Medicaid enrollees particularly after the initial start-up period are not likely to be markedly different from the non-disabled that are currently on Medicaid, since the new enrollees will be drawn from a population that is healthier than adults currently on Medicaid.

A Kaiser Family Foundation issue brief also points out that benchmark or benchmark-equivalent coverage must be equal to the coverage provided in one of three benchmarks -- the standard Blue Cross/Blue Shield PPO plan under the Federal Employee Health Benefits Plan, a state employee plan or a commercial HMO product -- equivalent in actuarial value to one of the three benchmarks or a package approved by the HHS secretary. -- Rachana Dixit (This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

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