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YSPH Study Highlights Implications of Instability in Medicaid Markets

June 27, 2017

Millions of Americans with Medicaid coverage were affected when their insurance plans exited state Medicaid programs from 2006 to 2014, highlighting potential instability in these markets for Medicaid beneficiaries and the quality of care received, a new study led by the Yale School of Public Health finds.

The study, published in the journal JAMA, shines light on the challenges states face in trying to promote competition among health plans in Medicaid to improve quality and reduce costs, while also ensuring that Medicaid beneficiaries are not adversely affected by disruptions in the continuity of care. Over three-quarters of Medicaid beneficiaries now receive their health insurance from independent “managed care” plans, the result of a large shift over recent decades toward the market-based provision of insurance for low-income Americans. Under their contracts with states, these plans provide comprehensive coverage to Medicaid beneficiaries; the plans may choose to stop participating in Medicaid if it no longer proves financially advantageous to do so.

“Plan exits can result in short-term disruptions in care if Medicaid beneficiaries, in transitioning to new plans, have to navigate new physician networks and engage with new health care providers,” said lead author Chima Ndumele, Ph.D., an assistant professor in the School of Health’s Department of Health Policy and Management. “If exiting plans perform poorer than remaining plans, however, plan exits could benefit Medicaid markets in the long-run.”

Almost 30 percent of the plans included in the study exited from state Medicaid programs. While these plans tended to be lower quality than those that remained, the research team found that plan exits were not associated with significant changes in market quality across an array of health care services, including preventive care (e.g., flu shots), maternity care, chronic disease care and patient satisfaction.

The study has gained additional relevance in light of the current health care debate in Congress. Some policy observers have speculated that proposed changes to financing the Medicaid program may make Medicaid less financially attractive for private plans, increasing the rate of plan exit.

“States face a difficult balancing act,” Ndumele said. “While they want to use competition in these markets to ensure Medicaid beneficiaries continue to receive high-quality care, they also likely need to be focused on ensuring competition does not unnecessarily result in disruptions in patient-provider relationships.”

When plans do exit the Medicaid program, the study authors suggest that states should be vigilant about ensuring beneficiaries are re-assigned to plans in a manner that minimizes disruptions: for example, states can try to enroll beneficiaries in new plans that allow them to keep their current primary care provider.

Other members of the team include YSPH Professor Mark Schlesinger, doctoral student William Schpero, and Amal Trivedi, an associate professor at the Brown School of Public Health.

Submitted by Denise Meyer on June 27, 2017