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

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exceptions - have largely based their managed care programs on the private employer model that
offers primary and acute care to a population composed of relatively healthy young families - the
AFDC population. As with the private sector, states have less experience with managed care for
the elderly and disabled.
Theoretically, the dually eligible population is ideally suited to managed care because the
complexity of their medical needs lends itself to case management and coordinated care. In
addition, dually eligible individuals are enrolled in the Medicare and <strong>Medicaid</strong> programs on a
long-term basis making enrollment more stable and tracking and monitoring of care more
feasible to assure clinical coordination and accountability by the plans. The long-term
enrollment of duafeligibles also creates more incentives for plans to make investments in care
that pay off only in the long term. This stands in stark contrast to the AFDC population which
tends to be enrolled in <strong>Medicaid</strong> only episodically, churning in and out of the program and
thereby creating plan disincentives to preventive investments in care.
While managed care should theoretically work well for chronically ill populations, the
marketplace to date is only at the beginning stages of development. As seen in the attached
table, many states exclude certain disabled populations from mandatory plan enrollment.
Whether this exclusion is inititated by the states or by the plans entering the <strong>Medicaid</strong> market is
unclear. Even where disabled populations are included, state efforts to develop the specifications
for providing care to chronically ill, disabled people and the frail elderly are in very early stages
of evolution.
Because managed care in the private employment sector has been used almost exclusively
for healthy, often young, working families, there is simply very limited experience upon which
to develop standards for care of the disabled/chronically ill population in a managed care context.