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Many smaller, regional health plans find themselves at a crossroads, weighing business diversification with risk. But recent changes to the Medicaid market have health plans looking for their next main line of business.  

Health plans are considering pivoting Medicaid support to their Marketplace business for two main reasons: 

  1. Significant Disenrollment: As of April 2024, over 20 million Medicaid enrollees have been disenrolled during the redetermination process. Despite efforts to transition disenrolled members to alternative forms of coverage, success has been limited. Health plans are struggling with a lack of member and enrollment data, with insufficient reporting to track members transitioning from Medicaid to Affordable Care Act (ACA) offerings and to effectively target former Medicaid members with informational material. 
  2. Contract Renewals and Changes: States are renewing their Medicaid managed-care contracts and announcing the results of 2023 RFP contracts. Texas and Florida are making significant changes in awarded health plans. Several health plans that were awarded a state Medicaid contract six years ago are now excluded from the market. 

Given these challenges, there’s a renewed interest among health plans in entering and expanding in the ACA Marketplace. This strategic pivot is seen as a viable alternative for plans grappling with the repercussions of Medicaid disenrollments and market exits. 

What Health Plans Need to Consider When Diversifying Market Offerings  

Collaboration is Key and Partners are Ready to Help 

Medicaid membership loss is not exclusive to one state or health plan. It’s a widespread challenge, with disenrollments exceeding initial projections and significantly impacting many health plans. It’s crucial for affected organizations to recognize the power of collaboration. By partnering with other health plans, community organizations, government agencies, and technology partners, it’s possible to leverage a broad spectrum of expertise and resources. 

For health plans looking to enter the Marketplace, piecing together disjointed systems creates operational gaps and sticking points for automated workflows. When constructing your Marketplace infrastructure, seek partners that provide preexisting relationships and APIs with downstream operations and CMS. For example, financial reconciliation is a common issue for health plans new to the Marketplace. 

Clear Communication with Members and Potential Members 

If you’re feeling the stress of Medicaid market shifts, your members likely are as well. Whether your health plan is trying to retain members, enroll new members due to market exits, or direct members to alternative forms of coverage, a consistent communication strategy is essential. One of the biggest hurdles during this transitional phase is the confusion arising from inconsistent messaging by state agencies and health plans. Effective communication strategies not only assist members during transitions but also educate them about changes and alternatives in their healthcare coverage. 

For health plans with 2024 Medicaid-managed care contracts, support members by educating them on their Medicaid offerings and supporting transitions to ACA coverage. Working together with community organizations that frequently interact with Medicaid members is an underutilized communication pathway. 

Optimize Your Resources for Better Member Support  

One of the biggest challenges regional health plans face when entering new markets is scaling member support. While AI and automated pathways can resolve a portion of member inquiries without human intervention, the cornerstone of a community-focused health plan is interactions with members. 

Amid shrinking budgets, the need for additional call-center staff and administrative support becomes even more pronounced. Health plans must look towards automating repetitive tasks to free up their staff to focus on more critical issues. This optimization not only improves operational efficiency but also enhances member service during a time where every interaction counts. 

Simplify Alternative Coverage Enrollment 

Regardless of the type of government-sponsored coverage that your health plan offers, providing a cohesive member experience is crucial. For Marketplace offerings, health plans should provide a single-sign-on shopping experience that encompasses medical, dental, vision, and supplemental coverage. Simplifying the enrollment process for members can significantly ease the transition, making it less daunting to switch from Medicaid to ACA coverage. 

The current landscape for Medicaid and ACA markets is evolving rapidly. By focusing on collaborative strategies, clear communication, resource optimization, and simplifying the member experience, health plans can not only navigate these challenges but also position themselves strongly for future success. As the healthcare industry continues to transform, agility and proactive adaptation will be key to thriving. 

To discuss next steps towards market diversification and improving the member experience, reach out to me at bredman@softheon.com.