Medicaid plan overlap allows for continuous coverage for low-income consumers

Nearly four in 10 organizations that offer health inurance through state marketplace exchanges operate a Medicaid managed care plan in the same state, providing low-income consumers with an opportunity for continuous coverage, according to a new report from the Association for Community Affiliated Plans (ACAP).

The report found that 131 of 338 Qulified Health Plan (QHP) issuers (39%), were found to be ‘overlap issuers’-that is, they also offered a Medicaid managed care plan in the same state. Last year, 123 of 284 QHP issuers were found to be overlap issuers (43%). While the percentage of overlap issuers dropped slightly year over year, their overall numbers increased, according to the report.

The report found that 33 states had at least one overlap issuer, which was unchanged from the previous year. It also found a significant increase in consumer choice. Overall plan participation in marketplaces increased significantly-338 QHP issuers this year versus 284 in 2014. Seven states experienced a net gain of three or more QHP issuers, while only one state experienced a net loss of more than one QHP issuer.

“Market alignment is important for enrollee coverage and health,” says Managed Healthcare Executive Advisor Margaret A. Murray, ACAP chief executive officer. “We view ‘overlap’ plans as a medium for smoother, more organic transitions between Medicaid and the marketplace for people who live close to the 138% FPL threshold. Movement between Medicaid and the marketplace is going to happen to millions of people every year, especially as the economy improves and people return to the workforce.”

But the transitions between the two programs can result in gaps in coverage and compromised  care, according to Murray.

“A single source of coverage such as an overlap plan can not only potentially allow patients to keep their doctors, provider networks and plan contacts but may also reduce the gaps in coverage themselves, as plans operating in both markets have a natural incentive to retain their members as they move between Medicaid and the marketplace,” she says. “This would reduce the considerable administrative overhead involved for plans in taking a new member, and can lead to uncompensated care for hospitals should a member facing a coverage gap be in need of emergency care.”

NEXT: A county-by-county analysis

This year, ACAP took a closer look at county-by-county conditions.

“We had good data on Texas and New York, two states that have a good number of QHP participants and overlap plans,” Murray says. “It brings into stark relief the fact that consumers have far fewer choices than state-level data would indicate, as not all plans in all states have statewide service area. Our research shows that choice among overlap plans in Texas and New York track closely to population centers, and even then you’re talking about a maximum of three overlap plans in any given county in Texas, despite a total of 10 overlap plans statewide.”

While Texas features 15 QHPs and ten overlap issuers, county-level data reveal that each of Texas’s 254 counties offer fewer choices in practice:

• 12 counties offer three overlap issuers

• 13 counties offer two overlap issuers

• 113 counties offer one overlap issuer, and

• 116 counties offer none.

Texas has not yet opted to expand its Medicaid program, making a continuous source of health coverage far more difficult to attain for its adults who find work and transition off the Medicaid program owing to rising incomes.

A closer look is needed at the county level going forward, as well as a look at overlap coverage in the context of provider networks, premiums, or population, according to Murray.

The underlying data for the analysis came from McKinsey & Company’s Exchange Offering Database, which is analyzing coverage continuity and its affordability at a county level across the two states.