Understanding and engaging a new era of Medicaid consumers
A new McKinsey survey offers payors, providers, and state governments a way to understand key differences among Medicaid consumers— differences that have important implications for how to engage current and potential enrollees effectively.
Over the next 12 to 18 months, the Medicaid program will undergo the most fundamental change since its inception in 1965. In those states that have chosen to expand Medicaid under the Affordable Care Act (ACA), the increase of eligibility to 138 percent of the federal poverty level1 could enable approximately 18 million new people to enter the program by 2021.2 Even in states without Medicaid expansion, enrollment is expected to increase by 15 to 20 percent over the next eight years as people who were previously eligible but not enrolled come forward because of simplified enrollment processes and publicity about coverage expansion.2 By 2021, Medicaid spending could total almost $800 billion.2
The nature of the Medicaid program is also changing in important ways. Many states are moving away from fee-for-service (FFS) models and shifting their highest-acuity Medicaid members into full-risk managed care programs that cover a comprehensive set of services. For example, a number of states are undertaking demonstration projects to better integrate care for the dual-eligible population (people covered by both Medicare and Medicaid).3
These changes are creating unprecedented heterogeneity and complexity in Medicaid, but they also give payors, providers, and state governments a significant opportunity for growth and mission impact. To take advantage of this opportunity, these stakeholders need a better understanding of Medicaid members, especially dual eligibles and people entering the program next year. For both of these groups, stakeholders should understand a range of variables, including current health behaviors, attitudes about health insurance and care delivery, and preferences about where to seek information and advice.
To develop quantitative consumer insights about the Medicaid population, we surveyed more than 1,100 consumers across the United States, focusing on the following groups: current Medicaid members (both dual eligibles and those covered by Medicaid alone), people who are currently eligible for Medicaid but not enrolled (EBNEs), and people who will be eligible for Medicaid beginning in 2014 (new eligibles).4 We also included some commercially insured individuals to permit direct comparisons with them. To attract a representative sample of respondents from each group, we conducted the survey both online and at shopping malls, and administered it in both English and Spanish.
The results revealed two key insights:
- In many ways, people entitled to enter the Medicaid program next year (a group that we refer to as “potential entrants,” which includes both EBNEs and the new eligibles) are more similar to commercially insured individuals than to current Medicaid members. Nevertheless, there are several important differences between the potential entrants and commercially insured individuals. These differences have significant implications for plan design.
- Many dual eligibles are not being reached effectively, in part because of misconceptions about them. Managed care programs geared to these members will be more effective if grounded in a more accurate understanding of their needs, behaviors, and attitudes.
The results also allowed us to develop recommendations for how payors, providers, and state governments can engage effectively with the Medicaid population and to define the capabilities these stakeholders will need.
- About $15,400 per year for an individual and $31,800 for a family of four.
- DHHS. Report to Congress. 2012 Actuarial Report on the Financial Outlook for Medicaid. (This report acknowledges that the increase in the number of covered lives would be significantly higher if every state were to expand Medicaid.)
- Website of the Medicare Medicaid Coordination Office.
- Additional details about the survey can be found in the appendix, which begins on p. 147 of the Full Compendium.