Are Medicaid Health Care Consumers a Growing Market for Health Plans?
As Medicaid expansion becomes more widespread in the wake of the Affordable Care Act (ACA), health plan providers are being presented with a new opportunity to expand market share by reaching out to the Medicaid-eligible segment.
A recent analysis indicated that the number of Medicaid managed care plans is expected to increase by as much as 20% this year and up to 38% by 2016.
Though Medicaid is traditionally a low-reimbursement segment– and has varied by state– one of the major provisions of Obamacare was that the federal government would assume the entire cost of participating states’ Medicaid expansions until 2016. And whereas the fed and the states roughly shared the cost of Medicaid reimbursements before, the US is now assuming at least 90% of the costs from the states for these new Medicaid members through at least 2020. Accordingly, the fed will provide more than $900 billion in funding to expand Medicaid.
Those cash-flushed coffers add up to more reimbursement dollars for plan providers.
So who are your newly Medicaid-eligible consumers?
That will vary by state, but it’s natural to assume that this consumer base will have had only limited exposure to health plans over the past year.
Many may be disenfranchised workers, who have either been laid off for extended periods, or who were working part-time with no eligibility for benefits. Some may be non-working of self-employed individuals who did not previously meet income, household, age or disability requirements for Medicaid. Some may never have attempted to carry health coverage before and are either just now becoming curious to explore their options, or are being compelled to do so by the ACA’s tax penalties on uninsured persons.
We looked at the uninsured and current Medicaid members through the lens of our psychographic research where the predominant segment among both uninsured and Medicaid members is the reactive Willful Endurer who prefers to live for the moment rather than investing in wellness.
This has significant implications for a health insurance company trying to manage their health. Willful Endurers are very challenging to motivate toward behavior change, but it can be done. c2b solutions is involved with employers and healthcare organizations to develop effective interventions designed for this consumer segment.
Your plan development and marketing strategy should anticipate newly eligible consumers’ knowledge of— and reactions to— the ACA.
According to responses we received in the 2013 c2b Consumer Diagnostic, only 11% of consumers reported that they completely understand the new health exchanges and how to use them. That leaves quite a bit of room for providers to step in and develop education messaging for their target consumers.
But why do most consumers report virtually no understanding of the way the health exchanges operate? Have they expressed this not having actually been on the health exchanges? Or have they researched it and just do not understand it fully?
To determine some of the difficulties people encounter, the Diagnostic presented respondents with a general overview of the ACA:
“Starting January 1, 2014, the Affordable Care Act establishes Health Insurance Exchanges where consumers may choose from a selection of health insurance companies from an internet website managed by a governmental agency.
Consumers who are near poverty level and without health insurance will have their coverage paid for through these Exchanges with public funding (taxes). For everyone else, an employer may choose to continue providing health insurance to its employees. However, employers may also stop providing health insurance and require employees to shop for health insurance on the Health Insurance Exchange. Those employers may (or may not) provide vouchers to employees to help pay for some or all of these costs.
Unless a consumer is near poverty level, the law requires that he/she will have to get health insurance from his/her employer or purchase health insurance on the Health Insurance Exchange. If a consumer chooses not to get health insurance, he/she must pay a penalty up to 2% of his/her household income.”
Using a proprietary Emoti*Scape scale developed by our partner, Ipsos, we then asked survey participants to report two emotions they experienced after having read the ACA description. We found 56% of respondents reported at least one negative emotion, and the three most common negative emotions were “Skeptical” (15%), “Worried/Concerned” (11%) and “Confused” (9%).
Newly eligible consumers will be looking for simplicity.
Health care consumers who will be in the market for a managed Medicaid plan over the coming year are not likely to be sophisticated in terms of deciding between minute differences in coverage.
They will be budget-conscious. They will seek value. They may be confused or skeptical of Obamacare. And they will want their own providers in-network, if at all possible. They will not tolerate annual cost-shifting or provider blackouts.
The c2b Consumer Diagnostic measured the importance of 33 health insurance company/plan attributes among an extensive list of consumer types, including the uninsured. Aside from reasonable premiums and copays, the top important attributes include:
- Having doctors who communicate well with me
- Provides easy to understand information on what is covered by my plan
- Receiving accurate information from Customer Service
Your market differentiation points for a managed Medicaid plan shouldn’t focus on amenities and luxuries, but on provider excellence, affordability and simplicity to understand.