Hearken to the article
Dive Temporary:
Minnesota will not permit for-profit well being insurers to take part in its Medicaid program beginning in 2025, underneath a provision in an omnibus invoice signed into legislation final week.
The ban will solely instantly have an effect on UnitedHealthcare, which is the only for-profit managed care group with a Medicaid contract within the state.
Minnesota Medicaid covers roughly 1.1 million individuals, with UnitedHealthcare masking greater than 31,000 of that inhabitants.
Dive Perception:
The laws restricts Medicaid contracts to nonprofit entities, restoring Minnesota’s four-decade-long ban that was briefly overturned in 2017 by the state’s then-Republican legislature. Earlier than the 2017 repeal, Minnesota was the one U.S. state that banned for-profit corporations from promoting medical health insurance.
Now, as soon as once more, “the commissioner should not enter right into a contract with a well being upkeep group,” except they’re a nonprofit company or a governmental unit, reads the invoice, which handed the Democrat-controlled Minnesota legislature on Might 19. It was signed into legislation by Gov. Tim Walz, additionally a Democrat, on Friday.
Medicaid managed care, whereby states pay non-public well being insurers a flat fee per enrollee, has grown to grow to be the dominant Medicaid supply system within the U.S. The applications is usually a main income for insurers — Minnesota’s managed care contracts account for $8.7 billion in annual spending, in response to the state’s Division of Human Providers (DHS).
Nevertheless, insurers are going through rising criticism for limiting care to retain extra in Medicaid income as revenue. Because the corporations are paid on a capitated foundation, they could be incentivized to disclaim or restrict medical providers to pocket a bigger portion of the healthcare greenback.
That incentive has underpinned latest considerations in regards to the adequacy of Medicaid managed care plans. High Democrats in Congress launched an investigation into the standard of MCOs final yr, following analysis discovering excessive charges of protection denials.
Considerations are compounded when insurers are pushed by revenue motivations, in response to supporters of Minnesota’s ban.
Members of the Minnesota public included in a DHS research on the state’s insurance coverage markets stated they place a excessive worth on insurance coverage protection and care offered by nonprofits. Additionally they imagine that nonprofits are extra engaged with the group and attentive to native wants.
But information is scarce on the variations between for-profit and nonprofit HMOs, together with round operations, care high quality and member satisfaction, the DHS report revealed in February discovered.
A spokesperson for UnitedHealthcare stated in an announcement the corporate is “deeply disenchanted” by the laws, which “was added as a part of a closed-door course of, with out public enter, and seems to be particularly concentrating on a neighborhood firm that employs over 19,000 individuals within the state.”
“This laws is pointless and can disrupt well being care protection for greater than 31,000 Minnesotans whereas taking away selection for a lot of others by making a much less aggressive market,” the spokesperson continued.
Minnesota isn’t the one state shaking up its Medicaid suppliers. A number of others have just lately reprocured contracts.
Earlier this month, Kansas awarded contracts to incumbents UnitedHealth and Centene, whereas changing CVS with an Elevance plan.
Florida issued Medicaid awards in April, renewing contracts with Centene, Elevance and Humana however eradicating UnitedHealth, CVS and Molina from the state. Molina has already stated it plans to problem the choice, whereas UnitedHealth signaled it will transfer to protest as nicely. Molina can be difficult a latest Medicaid contract loss in Virginia.
New Hampshire and Michigan additionally reprocured bids earlier this yr, with Centene renewing its contract in New Hampshire. The Michigan awards basically preserved the established order within the state, with Centene, CVS, Molina and UnitedHealth reprocuring contracts with minor membership modifications.
