Following Arkansas legislators' vote to approve a private expansion of Medicaid last week, health insurer Centene CEO Michael Neidorff said the state's model to provide premium support for private coverage "would be a sweet spot" for the company, according to a report by Kaiser Health News.
Centene already holds Medicaid managed care contracts in several states and sees the health exchanges to launch next year as a massive opportunity to grow. One strength of the Arkansas-style plan is the reduction of "churn," meaning people who switch in and out of Medicaid enrollment each year as income changes. Helping to subsidize private insurance on a sliding scale to match income enables customers to stick to a plan they're satisfied with by keeping financial assistance aligned with their ability to pay for the plan.
A Centene official told KHN that if the company were able to participate in a premium support plan to cover Medicaid customers, its payment rates to providers would be higher than traditional Medicaid rates, but they may not be as high as typical private payor rates, which the Urban Institute has estimated to be 38 percent higher than Medicaid in some markets.
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Centene already holds Medicaid managed care contracts in several states and sees the health exchanges to launch next year as a massive opportunity to grow. One strength of the Arkansas-style plan is the reduction of "churn," meaning people who switch in and out of Medicaid enrollment each year as income changes. Helping to subsidize private insurance on a sliding scale to match income enables customers to stick to a plan they're satisfied with by keeping financial assistance aligned with their ability to pay for the plan.
A Centene official told KHN that if the company were able to participate in a premium support plan to cover Medicaid customers, its payment rates to providers would be higher than traditional Medicaid rates, but they may not be as high as typical private payor rates, which the Urban Institute has estimated to be 38 percent higher than Medicaid in some markets.
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