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MANAGED CARE AND THE STATES

Updated: February 2009

     In the past 15 years managed care became the predominant form of health care in most parts of the United States.  More than 70 million Americans have been enrolled in HMOs (health maintenance organizations) and almost 90 million have been part of PPOs (preferred provider organizations). Overall enrollment numbers in HMOs peaked in 2001 and are declining substantially in almost every area, but managed care generally remains a dominant type of health care and coverage.  

In 2008 the breakdown of enrollment by plan type was as follows:

  • HMO (health maintenance org.) 20%
  • PPO (preferred provider org.)   58%
  • POS (point of service)               12%

   NON-MANAGED CARE:

  • HDHP (hgh deductible health plan)  8%
  • Conventional/Indemnity            2%

(source:
Employer Health Benefits, 2008, 
See Graphic, Sec. 5, Kaiser Family Foundation

  

 

STATE ROLES LIMITED BY ERISA:

State health insurance laws only apply to about 45% of health policies - those "fully insured plans" in which mostly small and medium sized businesses pay premiums.
     Only federal ERISA law applies to the other 55%, "self-insured plans". Some 73 million American workers and their dependants were covered by these  plans—that is, one in which the employer assumes the financial risk for providing health care benefits to its employees, rather than buying insurance. 
    (Source: EBRI, February 2008)

 

 Managed Care-Legislators

Managed Care in Medicaid
     Medicaid managed care grew rapidly in the 1990s.  In 1991, 2.7 million beneficiaries that were enrolled in some form of managed care.  By 2004, that number had grown to 27 million, an increase of 900%.  Of the total Medicaid enrollment in the United States in 2005, approximately 63% are receiving Medicaid benefits through managed care.  All states except Alaska, New Hampshire and Wyoming have all, or a portion of their Medicaid population enrolled in an MCO.  States can make managed care enrollment voluntary, or seek a waiver of section 1915(b) of the Social Security Act (the Act) from CMS to require certain populations to enroll in an MCO. "
     Medicaid Managed Care State Contracts - The George Washington University's Department of Health Policy publishes a series of unique studies of managed care contracts.  State-by-state profiles are included (click on states at the top of the page) These state profiles show the various components of each state's contract with health plans, including performance standards, reporting requirements, definition of actuarially sound rates, conditions under which money must be returned, etc.  Contact GWU for access to this material, at http://www.gwumc.edu/sphhs.

In Medicare, "Medicare Advantage" managed care plans saw a surge in enrollment as a result of the launch of "Part D" prescription drug coverage in 2006.    

The State Legislative Role:  Over the years, state legislatures have responded by passing numerous laws on the subject of managed care -- over 900 in the past 15 years, in all 50 states. [See a definition of managed care].   NCSL has a variety of print and web-based resources describing these efforts - see the list below

In 2001-2002 the U.S. House of Representatives passed an amended Patients' Rights bill; the U.S. Senate passed a somewhat different bill. However, at the end of the congressional session the bills died in a House-Senate conference committee, primarily on issues related to liability and the right to sue. Similar federal measures were filed for 2003-06, but were not voted on.

NCSL research and articles

Managed care resources from additional sources

These are selected research, academic and advocacy publications.  NCSL is not responsible for the contents or opinions expressed within these pages.

 OHIO HMO Enrollment at a Glance, 1992-2007  -excerpt from Alan Baumgarten report 6/08.
 OHIO 992-2007 HMO enrollment

Ohio  Graph:  "Enrollment in HMO employer group plans has declined steadily, going from a peak of 2.4 million in 1998 to 683,000 in June 2007. Employers, facing consecutive years of large premium increases left HMOs and sought other health benefit options, including plans with higher deductibles. In many cases, those employers moved from HMO plans to PPO offerings within companies like Medical Mutual, Humana and UnitedHealthcare.  However, enrollment in Medicaid HMO plans has doubled in the last 18 months. Ohio's Medicaid agency has added new Medicaid HMO plans in the Youngstown, Cincinnati and Columbus areas and enrollment has grown from 600,000 in December 2005 to 1.2 million in June 2007."
 

 

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