November 2015 The Still Expanding State of Medicaid in the United States Ari Gottlieb Director PwC Strategy&, Payer Strategy November 2015
Agenda The Medicaid Marketplace Still Expanding Medicaid Managed Care Overview Medicaid Expansion Assessment Future Medicaid Growth Considerations Questions? 1
Before we begin a note on data & sources Source Overview All data referenced in based on state reporting of current membership, publicly disclosed or available through Freedom of Information Act (FOIA) requests 2015 data is from June September 2015 Year-over-year comparisons from Summer 2014; Two year comparisons from Summer 2013 Membership in Medicaid is as defined by states and is limited to physical health services Exceptions & Items of Note California Fee-For-Service is as of May 2015 All reported figures at the prime contract level, sub-contracts are not represented Membership is aggregated at the parent company level (or majority owner for most joint ventures) Private Managed Care plans exclude state-owned assets (such as Green Mountain Care) but includes non-state run public entities (such as LA Care) 2
Agenda The Medicaid Marketplace Still Expanding Medicaid Managed Care Overview Medicaid Expansion Assessment Future Medicaid Growth Considerations Questions? 3
Medicaid is a program that delivers critical health coverage to millions of Americans Low Income Children 72.9 million Americans (22.9% of the US population) Disabled Pregnant Women Low Income Adults Refugees Blind Elderly 4
Seven states enroll over 30% of their population in Medicaid; while Utah has fewer than 10% #49 #3 #51 (8.7%) #50 #1 (34.7%) DC #2 <18% 18% - 23% Source: State reports, PwC Strategy& analysis. Membership as of Summer 2015 23% - 30% >30% 5
Medicaid growth over the past two years has been unprecedented 57.6 million 2013 66.6 million 2014 72.9 million 2015 1 in 20 Americans added to Medicaid in the past 2 years 1 in 4 receiving Medicaid benefits 6
while growth moderated over the past year DC <0% growth 0-5% growth 5-15% growth 15-25% growth Source: State reports, PwC Strategy& analysis. Membership as of Summer 2015 7
two year growth rates are extraordinary, especially in the West +60% +85% +77% DC <0% growth 0-10% growth 10-25% growth 25-50% growth >50% growth Source: State reports, PwC Strategy& analysis. Membership as of Summer 2015 8
Agenda The Medicaid Marketplace Still Expanding Medicaid Managed Care Overview Medicaid Expansion Assessment Future Medicaid Growth Considerations Questions? 9
Today, 41 states have some form of private Medicaid health plans, up from 37 in 2013 New DC No private managed Medicaid 60%-80% private managed Source: State reports, PwC Strategy& analysis. Membership as of Summer 2015 Less than 60% private managed More than 80% private managed 10
The growth in private Medicaid health plans has far outpaced overall program growth Total Medicaid Beneficiaries (Millions) Private Medicaid Beneficiaries (Millions) 80 70 60 50 40 30 20 57.5 +9.0 MM +16% 66.5 +6.3 MM +10% 72.9 80 70 60 50 40 30 20 70% now in private Medicaid health plan 34.2 +9.3 MM 43.5 +7.8 MM +18% 51.3 10 10 +27% 0 2013 2014 2015 0 2013 2014 2015 Source: State reports, PwC Strategy& analysis. Membership as of Summer 2015, Summer 2014, and Summer 2013. 11
Private Medicaid continues to be highly fragmented and local 175 single state 8 more than 4 states 81 with less than 50,000 members 12 with over 1 million members 139,000 average membership (excluding 12 jumbos and MLTC only) 194 Medicaid plans (up from 183 last year) 12
The largest twelve plans collectively have 56% of total membership Plan Members States Served Anthem 5.1 million CA, FL, GA, IN, KS, KY, LA, MD, NJ, NV, NY, TN, TX, VA, WA, WI, WV United 5.0 million AZ, DE, FL, HI, KS, LA, MD, MI, MS, NE, NV, NJ, NM, NY, OH, PA, RI, TN, TX, WA, WI Centene 4.2 million AZ, AR, CA, FL, GA, IL, IN, KS, LA, MA, MO, MS, NH, OH, SC, TX, WA, WI Molina 2.7 million CA, FL, IL, MI, NM, OH, SC, TX, UT, WA, WI WellCare 2.3 million FL, GA, HI, IL, KY, MO, NJ, NY, SC LA Care 1.8 million CA Health Net 1.5 million AZ, CA Aetna 1.4 million FL, IL, KY, LA, MI, MO, NE, NJ, NY, OH, PA, TX, VA, WV CareSource 1.2 million OH AmeriHealth Caritas 1.2 million DC, LA, NE, PA, SC Fidelis 1.1 million NY Inland Empire HP 1.1 million CA Source: State reports, PwC Strategy& analysis. Membership as of Summer 2015, Summer 2014, and Summer 2013. Note: Includes prime contracts only; does not include joint ventures. 13
Agenda The Medicaid Marketplace Still Expanding Medicaid Managed Care Overview Medicaid Expansion Assessment Future Medicaid Growth Considerations Questions? 14
Growth this year was relatively uncorrelated to expansion status +16% +21% +24% +17% DC Expansion <0% Expansion +0-5% Expansion +5-15% Expansion >15% No expansion <0% No expansion +0-5% No expansion +5-15% No expansion >15% Source: State reports, PwC Strategy& analysis. Membership as of Summer 2015 Late expansion state 15
while over two years, expansion status had more relation to overall enrollment growth DC Expansion <0% Expansion +0-20% Expansion +20-40% Expansion >40% No expansion <0% No expansion +0-10% No expansion +10-20% No expansion >20% Source: State reports, PwC Strategy& analysis. Membership as of Summer 2015 16
Eligibility no longer plays a determinant factor in expansion gains; the Medicaid Expansion gap now stands at 5.1 Million Generous Expanders (18 states) Greatest Expanders (11 states) 2014 Enrollment Growth: +22% 5.8MM New Beneficiaries 2014 Enrollment Growth: +32% 2.1MM New Beneficiaries 2015 Enrollment Growth: +11% 3.8MM New Beneficiaries 2015 Enrollment Growth: +11% 1.3MM New Beneficiaries Enrollment Growth: +36% 2 Year Total 9.6MM New Beneficiaries High Threshold Statics (5 states) Enrollment Growth: +3% 2014 0.2MM New Beneficiaries Enrollment Growth: +35% 2 Year Total 3.4MM New Beneficiaries Missed Opportunities (17 states) Enrollment Growth: +6% 2014 1.1MM New Beneficiaries 2015 Enrollment Growth: +6% 0.2MM New Beneficiaries 2015 Enrollment Growth: +5% 1.0MM New Beneficiaries 2 Year Total Enrollment Growth: +9% 0.3MM New Beneficiaries 2 Year Total Enrollment Growth: +11% 2.0MM New Beneficiaries 17
Agenda The Medicaid Marketplace Still Expanding Medicaid Managed Care Overview Medicaid Expansion Assessment Future Medicaid Growth Considerations Questions? 18
Given the market dynamics over the prior two years, the era of easy Medicaid growth may now be over Coverage approaching natural ceiling with 1 in 4 Americans already covered ACA growth stalling on Exchanges prime driver of Medicaid enrollment 41 states now with some form of private Medicaid health plans Diminishing unserved populations not already on private managed care Remaining opportunity largely concentrated in high acuity, complex individuals 19
Despite market challenges, plans can prepare to succeed in over the long-term 1 2 3 Gain scale through Medicaid consolidation Grow through expansion in new markets Create the capabilities to win in the remaining frontiers 20
Agenda The Medicaid Marketplace Still Expanding Medicaid Managed Care Overview Medicaid Expansion Assessment Future Medicaid Growth Considerations Questions? 21
For additional information or a copy of the full report, please contact: Ari Gottlieb ari.gottlieb@pwc.com This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. 2015 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is general information purposes only, and should not be used as a substitute for consultation with professional advisors. 22