Last week the Arkansas legislature approved
a plan to give Medicaid beneficiaries money to buy individual policies
from private insurers on the state’s health insurance exchange — the
subsidized, online markeplaces due to be in business next year. The
governor signed the bill Tuesday — making it law.
The Department of Health and Human Services, which has said it “will consider approving a limited number” of such arrangements, still needs to negotiate details and sign off.
One insurer is already expressing interest.
are very capable of doing an Arkansas-type model,” Centene Corp. CEO
Michael Neidorff said Tuesday. “That’s something that would be a sweet
spot for us.”
Centene sees opportunity in participating in the
health law’s coverage expansions, whether Arkansas-style or not. It
already runs Medicaid managed care plans for those with very low incomes
in several states, although not in Arkansas. Now it wants to offer
plans to individuals with slightly higher incomes through the exchanges.
believe we can achieve increased profitability in 2014 upon the
commencement of the ACA,” Neidorff told stock analysts Tuesday. “The
exchange market represents the largest growth opportunity for Centene
over the next several years, estimated at $52 billion in our existing
Policy analysts expect considerable “churn”
from members moving between the ACA’s expanded Medicaid program and
commercial policies sold on the exchanges as their incomes fluctuate.
Centene wants to be on both sides of the line, selling “a product that
offers people a comfortable transition,” said K. Rone Baldwin, chief of
the company’s insurance group.
Whether managed by Centene or some
other carrier, private, individual insurance in the Arkansas mode could
help Medicaid members keep the same doctor and otherwise minimize
disruptions when they graduate to a non-Medicaid exchange plan, some
The Arkansas model faces large questions. Not least are those about cost.
Commercial insurance of the type Arkansas sees covering Medicaid
members typically pays doctors and hospitals more than traditional
Medicaid or Medicaid managed care plans like Centene runs.
executives spoke to investment analysts on a conference call about the
company’s quarterly profits. Like other insurers, they were coy about
saying where they plan to offer exchange plans and on what terms.
do expect to be on the exchanges in a subset of the places where we
have health plans today, and we’re entering into contracts with
hospitals,” said Baldwin. How well will Centene be paying those
hospitals to care for its exchange members? “It’s certainly not exactly
at [lower] Medicaid rates but I wouldn’t say it’s exactly at [higher]
commercial rates either,” he added.
The company earned $23 million for the quarter on revenue of $2.5 billion.