Two Reasons Health Reform Will Bring Medicaid Managed Care Expansion

The failure to integrate immediate pharmacy benefit information because drugs are carved out of Medicaid managed care leaves out an important piece of care coordination. Without having that pharmacy information, health insurers don't know if their members were placed on a particular medication that may signal the need for a disease management program.

Medicaid managed care is one of the few growth areas for health insurers. Forward-thinking health plans have already invested in Medicaid, but health reform will likely interest others to follow suit.

Health reform could boost Medicaid managed care and woo more insurers into the program.

Medicaid managed care is a great opportunity for insurers, but there are pitfalls. As I wrote in December, Medicaid beneficiaries are quite different from the typical group market member. There are housing, transportation, and education issues in Medicaid populations that are not common in the employer-based insurance market. Insurers not used to dealing with these issues will have to implement new programs and outreach efforts.

Health reform will spark Medicaid managed care, but insurers should understand that Medicaid comes with its own unique challenges. If they don't develop population-specific programs, their Medicaid managed care programs will likely fail.

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