By Jon Kamp
The state of Ohio has selected a handful of insurers including
Aetna Inc. (AET), Molina Healthcare Inc. (MOH) and Centene Corp.
(CNC) to divide up coverage of high-cost patients who qualify for
both Medicaid and Medicare starting next year.
The Ohio Department of Job and Family Services also picked
UnitedHealth Group Inc. (UNH) and an alliance between the nonprofit
health plan CareSource and Humana Inc. (HUM), according to details
issued on a state website. The five selected plans will divide
coverage of about 114,000 "dual-eligible" patients in Ohio under a
demonstration plan that will begin enrolling people April 1.
The state unveiled in late June which plans had scored the
highest with their proposals to cover dual-eligible patients. The
plans then picked the regions they wanted to serve, under state
rules saying no plan can serve more than three of seven regions,
and results were released Monday.
Centene, the CareSource/Humana alliance and UnitedHealth were
all named to a region that includes Cleveland and has the most
dual-eligible patients.
Dual-eligible patients qualify for Medicare because of age or
disability and Medicaid because of low income. Despite the double
coverage, they often wind up with poorly coordinated care from the
systems' different rules.
Several states are working with the federal government on ways
to improve care while potentially tamping down costs. Ohio
estimates its overall population of about 180,000 dual-eligible
patients represent only about 14% of the state's Medicaid
enrollment, but 40% of Medicaid spending.
The heavy spending has enticed managed-care firms while helping
to spark a recent run of deal making in the industry. Aetna's plan
to buy Coventry Health Care Inc. (CVH) for about $5.7 billion,
announced last week, was made in part with an eye on winning
dual-eligible business. WellPoint Inc. (WLP) said covering dual
patients was a driving force behind its plan, announced last month,
to buy Medicaid insurer Amerigroup Corp. (AGP) for $4.46
billion.
Medicare-focused Humana has talked down the idea of buying
Medicaid plans, but has talked up the idea of alliances. Humana
announced plans in March to partner with CareSource, a big Medicaid
provider in Ohio, with the aim of serving dual patients there and
elsewhere. Humana has also said it is open to more
partnerships.
The high-cost dual patients bring the promise of lots of
revenue, in the form of premiums collected to cover them, but also
the risk of high costs if their care isn't well managed. CareSource
and Humana said in a release they will use experience in both
programs to enhance care-coordination while making Medicare and
Medicaid easier to navigate.
Companies selected to serve dual patients in Ohio will enter
three-way contracts between the state and the Centers for Medicare
and Medicaid Services. The states divide Medicaid spending with the
federal government, and the federal government handles Medicare
costs.
Aetna shares rose 0.7% to $39 Monday while Molina rose 2.9% to
$24.46. Centene shares rose 1.7% to close at $40.70 and
UnitedHealth climbed 0.8% to $54.61. Humana shares rose slightly to
close at $70.02.
Write to Jon Kamp at jon.kamp@dowjones.com
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