Medicaid Managed Care - U.S. Senate Special Committee on Aging

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ual is getting state-of-the-art treatment of his or her condition in
terms of the outcomes that that individual may have.
The third theme that came out of that panel was that this care
that individuals are going to require is care for a lifetime, and that
they have been strongly influenced by their conditions, that their
ability to work may have been compromised early in life-they may
never have had a chance to work, and they probably are not going
to have a chance to work in the future. Therefore, their economic
resources are often limited.
In addition, when some of these conditions occur very early in
life, their social resources are often limited. When you look at the
population of people with special needs, they are much less likely
than the rest of the population to have ever married, so they do
not have a spouse or a family, who are often the most important
caregivers for individuals with chronic conditions.
These people with special needs are a very important part of the
<strong>Medicaid</strong> program. Currently, the people who are elderly or have
a disability comprise about 28 percent of the <strong>Medicaid</strong> population,
but they account for 61 percent of <strong>Medicaid</strong> expenditures, and that
somewhat understates how expensive it is to care for individuals
or provide care for individuals with special needs, because after all,
there is a significant population of dual-eligibles, and Medicare is
parng a significant share of the cost of the medical care for those
individuals.
We have seen in recent years the movement to <strong>Medicaid</strong> managed
care. It has been sort of an outgrowth of the rapid growth of
<strong>Medicaid</strong> costs over the late 1980's and early 1990's and the belief
that managed care provides some opportunity to bring those costs
under better control.
In 1996, about 15 percent of the <strong>Medicaid</strong> beneficiaries were in
capitated managed care plans; however, 90 percent of them were
in the AFDC or AFDC-related categories. Only about 10 percent of
them were in the disabled or elderly categories.
Last year, we undertook a review of State activities with respect
to managed care for people with disabilities and the elderly and
found out that there were 17 States that were significantly involved
in providing services to these populations through managed
care. In six of these States, there was mandatory enrollment of individuals
in managed care, and only one of these had 3 years or
more of experience when we did our review last year. The other
programs in the other 11 States were all voluntary and still were
relatively small, although there were about 12 States at that time
that were planning to implement some type of mandatory enrollment
for at least some of their disabled populations.
This review, as well as the discussions about the movement of
persons with special needs into <strong>Medicaid</strong> managed care has raised
questions about the readiness of States and the readiness of the
plans to serve this population, given that historically, the bulk
have been interested in managed care for a population of much
healthier people-the moms and kids in the <strong>Medicaid</strong> program.
Therefore, one of the things that I think we need to focus on is
what considerations we should keep in mind regarding the movement
of people with special needs into managed care. Starting by
looking at the managed care model, which involves the use of pri-