Medicaid
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In Medicaid, Money Talks (If You Listen)

August 30, 2021
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A mentor of mine once told me that if I wanted to understand the stakeholders in a given public policy issue, I must first figure out how who gets paid. While this may be a pessimistic lens through which we can understand policy, it’s useful.  

Ohio Medicaid represents 4 percent of our state’s economy. And while the majority of these taxpayer funds come from federal sources, bringing in more money than we give, it means that Medicaid can also be big business. These dollars, mind you, don’t end up in the pockets of beneficiaries. Instead, the money serves as a crucial source of coverage for one in four Ohioans financing the majority of care for children, persons with disabilities and older adults. But “to finance care” is no simple thing. What that 4 percent ultimately represents are the services, equipment and operations associated with that care, putting pressure on the budget of the department and policymakers to create the most efficient and effective system possible.

 Ohio Medicaid fundamentally relies on private insurance to manage its program.

Ohio Medicaid fundamentally relies on private insurance to manage its program. Conceptually, the purpose of managed care is to rely on market-based competition in benefit management so as to encourage the best combination of quality, value and access. And while there is certainly room to improve in Ohio, we have already seen some of these mega-contractors, which manage nearly one out of every three dollars the General Assembly appropriates, do what they can to stymie competition and force their way into Ohio’s program. But as those processes resolve, another anti-competitive narrative is emerging around plan selection.  

Medicaid managed care is made possible through a 1915(b) “Freedom of Choice” waiver and all managed care programs must adhere to federal standards regarding enrollment. Ohio, like many states, is a “mandatory” managed care state, meaning for most populations, beneficiaries must choose a managed care organization (MCO/”plan”) or one will be assigned to them. When choosing, individuals are provided with information about how to choose a plan and are directed to materials which explain benefits, plan performance and plan networks. Most enrollees in Ohio are assigned. Those who make a choice have about 30-60 days to do so depending on the county and the plan in question.

 Beneficiaries must also be given the opportunity to choose a plan that best suits their needs and must be able to change plans within 90 days of selection and every 12 months.

Importantly, beneficiaries must also be given the opportunity to choose a plan that best suits their needs and must be able to change plans within 90 days of selection and every 12 months, thereafter. And while plans are required to work with beneficiaries to manage any sudden changes in benefits or networks, enrollees can still change which plan they belong to if the MCO in question is not helpful. To help facilitate this process, states often contract with an independent broker and, since 2018, all states are required to provide independent choice counseling for individuals when they select. In fact, states can partner with community-based organizations to be able to get this done.  

Recently, the General Assembly started raising questions about how the introduction of new plans through procurement may disrupt continuity of care. It’s a good question, but not one that should limit patient choice. First, states have to ensure there isn’t any disruption in the ongoing course of treatment. States, then, can require transition periods for beneficiaries to receive treatment with a provider even if the provider is not in that plan’s network. This enables the plan to either case manage the transition to a new provider or, if needed, include that provider in their network. Additionally, most providers in Ohio contract with the majority (if not all) of the available plans, and plans themselves have to ensure “network adequacy.”

 We should be encouraging an effective, efficient system that rewards plans based on performance.

Policymakers would be well-advised to be suspicious of claims from legacy plans making statements regarding continuity. Ohio patients are enabled to pick whatever plan they like and the state must ensure networks are equipped to address their needs. Because, at the end of the day, we should be encouraging an effective, efficient system that rewards plans based on performance, not market share –that’s the point of having a managed care system. And, if you are unsure as to why these claims are being made now, just ask yourself, “Who is getting paid?”

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