New Hampshire officials have chosen Boston Medical Center’s HealthNet Plan as one of three insurers to manage care for low-income and disabled residents, if a proposal to overhaul the state’s Medicaid program gets necessary approvals from the governor’s executive council and federal authorities.
The New Hampshire Legislature last year voted to change the program from a state-run system in which doctors, hospitals, and other providers are paid for each test and treatment to one that is run by contracted health plans paid a designated fee for each patient, called a managed care model.
The plan -- and the Boston insurer’s interest in it -- reflects growing competition in the Medicaid market, which historically has not been thought of as a fruitful area for business.
The market is set to grow dramatically in 2014. The Affordable Care Act requires states to cover people who make up to 133 percent of the federal poverty level, or $14,856 for a single person this year. For most states, unless the Supreme Court overturns the law, that means a significant expansion.
“It’s definitely a growing market,” said Alan Weil, director of the National Academy for State Health Policy.
New Hampshire serves between 130,000 and 140,000 Medicaid enrollees over the course of a year, and Health and Human Services Commissioner Nick Toumpas said he expects another another 50,000 to become eligible in 2014.
Those who come on the program are likely to be less sick than those already on it, which means plans like HealthNet that are accustomed to managing very sick patients have an opportunity to do well as the numbers grow.
The venture would be the first outside of Massachusetts for the nonprofit, founded 15 years ago as a Medicaid plan. The other insurers selected in New Hampshire, Centene Corp., which operates CeltiCare in Massachusetts, and Meridian Health Plan, are for-profit organizations with plans in multiple states.
BMC HealthNet President Scott O’Gorman said New Hampshire offered an opportunity to diversify. The Massachusetts Medicaid program accounts for about 80 percent of the insurer’s business, with the rest coming from Commonwealth Care, the state-subsidized exchange established under the state’s 2006 health law.
O’Gorman said that the plan is considering expanding elsewhere, and “New Hampshire is a logical first step.”
Under the managed care approach, all Medicaid enrollees will be required to have a primary care physician. That means the health plans will need to establish relationships with doctors throughout the state.
For that, HealthNet has partners with Harvard Pilgrim Health Care, which already operates in New Hampshire’s commercial market with a network that includes all 26 acute-care hospitals in the state and about 4,300 physicians.
The Medicaid program was a “natural extension” for Harvard Pilgrim, said Beth Roberts, vice president of regional markets.
“We’re trying to grow on our existing footprint,” she said. “We want Harvard [Pilgrim] to be known for being able to serve a broad population.”
Commercial health plans also will be looking to build rapport among Medicaid enrollees, Weil said. As those enrollees earn more income and being ineligible for Medicaid, they will be required under the national law to obtain coverage through the commercial market. Most states are in the process of creating virtual health insurance markets, or exchanges, to make that easier.
Medicaid enrollees who have Harvard Pilgrim-affiliated doctors while on Medicaid might be more likely to choose a Harvard Pilgrim plan to keep their care consistent, Weil said.
Medicaid “is now a larger market, and it’s much more closely tied to a new market that really hasn’t settled yet because the exchanges aren’t up yet,” Weil said.
The three contractors in New Hampshire would share up to $2.2 billion over three years and have the option to extend their contracts with the state for another two years.
The arrangement is expected to save the state about $16 million in the first year, Toumpas said. But it has drawn scrutiny from disability advocates, long-term care providers, and others worried that the new system would dramatically alter the state’s network of care for those enrollees who need it most. The governor’s executive council, which must approve the plan to go forward, recently put off a vote on the contracts until later this month.Chelsea Conaboy can be reached at email@example.com. Follow her on Twitter @cconaboy.