Two million enroll in Medicaid during first half of 2009

Nov 20 2009

HealthLeaders-InterStudy, the leading provider of managed care market intelligence, reports that nationwide, Medicaid enrollment grew by two million lives in the first half of 2009 to more than 52 million, reflecting the economic downturn and exacerbating many states' budget concerns. According to data from Managed Market Surveyor-Rx, Medicaid growth nationwide increased nearly five percent, with 25 states, including Florida and Michigan, experiencing enrollment growth of more than five percent.

Managed Medicaid--in which states contract with private insurers to manage Medicaid enrollees' healthcare through HMO-style plans--grew by approximately 1.6 million members from January 2009 to July 2009. A significant portion of the growth seen in this sector (more than 760,000 enrollees) was in "carve out" programs in which the state handles all of the pharmacy benefit rather than contracting with health plans for that service. States with "carve out" programs include Texas, New York and Wisconsin. Another 850,000 of the growth appeared in states that carve out only a part of the pharmacy benefit, including California, Florida and Michigan.

"While managed care organizations may see market share and enrollment numbers increase with new Medicaid members, this growth will not necessarily translate into rising net income because of the narrow margins in Medicaid," said Sheri Sellmeyer, vice president of market analysis for HealthLeaders-InterStudy. "An increase in the Medicaid population may benefit the pharmaceutical industry because more people have pharmacy benefit coverage under Medicaid than they might with individual policies or if they are uninsured. However, both health plans and pharma should be prepared for states to take action to control escalating healthcare costs. State budgets are already strained so lawmakers may seek to tighten Medicaid eligibility and reduce benefits--including pharmacy benefits--in order to hold costs to a sustainable level."

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Managed Market Surveyor-Rx delivers medical and pharmacy benefit enrollment data by managed care organization and geography (national, state, MSA) to better inform strategic planning and resource allocation. Relying on primary research and HealthLeaders-InterStudy's proprietary validation methodology, Managed Market Surveyor-Rx provides the most accurate managed care database available.