Medicaid managed care plans have an opportunity to play a key role in recovery

Here’s a surprising outcome of the COVID-19 pandemic: Medicaid managed care plans (MCPs) likely find themselves in a financially advantageous situation. Medicaid enrollment is rising significantly across the country as the result of increases in unemployment and streamlined enrollment processes. At the same time, overall utilization of the health care system has fallen off a cliff due to shelter-in-place orders and social distancing guidelines. Health systems in most places nationwide (New York being a notable exception) have seen declines in emergency department visits for causes such as stroke, heart attack, injuries from car crashes, and gunshot wounds. Hospitals have canceled elective surgeries, and visits for outpatient and primary care services have plummeted to less than half their usual levels. The federal government has also pledged to cover costs for one category of utilization that has risen: COVID-19 response and treatment. To sum it up, income through capitation payments is going up due to increased enrollment, while expenses through payments to providers for services are declining.