By Jon Kamp
California has once again delayed plans to launch a large
program to test new ways to coordinate care for people on both
Medicare and Medicaid, and is now aiming to launch the program no
sooner than January next year.
This is a three-month delay from the state's most recent plan
for covering so-called dual-eligible patients, and the schedule had
already slipped from earlier hopes to launch the program at the
start of 2013. The program will cover as many as 465,000 patients
for three years through insurers Health Net Inc. (HNT), Molina
Healthcare Inc. (MOH), WellPoint Inc. (WLP) and other local health
plans.
"As you know, the state places a high premium on beneficiary
protections and is working deliberately to ensure a successful
implementation," said Toby Douglas, director of California's
Department of Health Care Services, in a note issued Monday, where
he indicated the final launch timeline isn't yet firm.
"We will be working toward a January 2014 start date and new
timelines will reflect that date," Mr. Douglas said. "However, we
will continue to assess the most appropriate start date as we work
to strengthen policy and conduct outreach and education."
California is one of several states aiming to streamline
coverage for patients who qualify for both Medicare and Medicaid
due to age or disability, plus lack of financial resources. The
states' goal--working with the federal government with some help
from the health-care overhaul law--is to simplify a
sometimes-confusing system while improving care and restraining
costs.
California secured federal approval in March for its program,
joining a handful of other states, including Washington,
Massachusetts, Ohio and Illinois, that had already won approval for
their own plans. The federal government covers Medicare costs while
dividing Medicaid costs with states.
The California program, known as Cal MediConnect, is the largest
one approved yet, even though the state has scaled back from
earlier plans to cover 800,000 dual patients. About 1.1 million of
California's Medicaid patients are considered dual eligible.
Wells Fargo analyst Peter Costa said the delay will lower
revenue estimates for insurers, but will have a limited impact on
earnings expectations. He also said the pushed-back timeline isn't
surprising.
The roughly nine million U.S. dual patients account for at least
$300 billion in annual health-care spending, making them a
sought-after market for health insurers. But there are also risks
involved. Dual patients are often very sick, and if they aren't
well managed, there is a chance they could rack up costs that
overwhelm insurers' incoming premiums.
Write to Jon Kamp at jon.kamp@dowjones.com
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