By Jon Kamp
The state of Illinois has picked several health insurers
including Medicaid-focused companies Molina Healthcare Inc. (MOH)
and Centene Corp. (CNC) to cover complex patients who qualify for
both Medicaid and Medicare beginning next year.
The Illinois Department of Healthcare and Family Services also
picked Humana Inc. (HUM), Cigna Corp. (CI), Aetna Inc. (AET) and a
few private plans. They will cover about 136,000 so-called
dual-eligible patients under a demonstration program, provided
federal authorities sign off on the Illinois plan.
The state aims to allow dual patients to start voluntarily
choosing carriers Sept. 1 next year, and then to begin passively
enrolling patients in plans--while allowing them to opt out--Jan.
1, 2014, a spokesman for the Healthcare and Family Services
department said Tuesday. Illinois announced its health-plan
selections Friday.
Illinois is one of about two dozen states aiming to test ways to
better cover patients who qualify for both Medicare and Medicaid
due to age or disability, plus lack of financial resources. The
states' aim--working with the federal government with some help
from the health-care overhaul law--is to streamline a
sometimes-confusing system while improving care and restraining
costs.
There are only about nine million dual patients in the U.S., but
they rack up at least $300 billion in annual spending, outpacing
costs for average patients on either government plan. The
complexity of these patients could raise challenges for companies
who take them on, but managed-care firms are jockeying for position
to win business nonetheless due to the huge revenue
opportunities.
Among publicly traded firms, the Illinois business should be
most meaningful for earnings at Molina and Centene, which are
smaller than Aetna, Cigna and Humana, Susquehanna analyst Chris
Rigg said. But he doesn't expect a positive earnings contribution
until 2014 due to the medical complexity of dual patients and
expectations for high startup costs to launch new business.
Illinois said units of Aetna, Centene, Humana and Cigna--along
with Blue Cross Blue Shield of Illinois and Meridian Health Plan of
Illinois--will cover dual patients in the greater Chicago area.
Molina and Health Alliance Medical Plans will serve clients in
central Illinois.
Write to Jon Kamp at jon.kamp@dowjones.com
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