Blue Cross And Blue Shield To Enter Florida Medicaid Program

May 11, 2011

In a potentially huge change, Blue Cross and Blue Shield of Florida plans to enter the Medicaid program and compete in what likely will become a statewide managed-care system.

Blue Cross, the state’s largest health insurer, has stayed out of Medicaid in the past. But its new stance comes as Florida lawmakers seek to enroll almost all Medicaid beneficiaries in managed-care plans — and as last year’s federal health law prepares to funnel more people into the system.

“As the state’s largest health insurer, BCBSF already serves many of Florida’s residents,” company spokesman John Herbkersman said in an e-mail Tuesday. “An expansion into the state’s Medicaid market allows BCBSF to provide the state’s Medicaid beneficiaries with the same level of service and quality that our members experience every day.”

The change is in its early stages. Herbkersman said the company is still considering issues such as when to enter the market.

Also, the Agency for Health Care Administration, which oversees Medicaid, has not received notification about Blue Cross’ plans, agency spokeswoman Shelisha Coleman said in an e-mail.

But Blue Cross is a well-known brand and already has relationships with physicians and other health providers across the state. Lawmakers last week approved a two-bill package aimed at turning Medicaid into a statewide managed-care system, and Blue Cross could be well-positioned to compete quickly.

“They’re going to be a strong competitor in every market they choose to enter,” said Bob Sharpe, a former state Medicaid director who unsuccessfully tried to attract Blue Cross into the program in the past.

Senate Health and Human Services Appropriations Chairman Joe Negron, R-Stuart, said he was aware that Blue Cross was considering the move.

“To have the state’s largest health-insurance company willing to enter the marketplace would be a huge step in favor of consumers,” said Negron, a key architect of last week’s Medicaid overhaul.

The overhaul, if approved by the federal government, would lead to almost all Florida Medicaid recipients enrolling in managed-care plans by the end of 2014. HMOs and another type of managed-care plan, known as provider-service networks, would compete for contracts in 11 regions of the state.

Meanwhile, last year’s federal health law will change Medicaid eligibility standards in 2014. That move, which is part of the Obama administration’s effort to make sure almost all Americans have health coverage, will increase the number of beneficiaries in Florida.

About 2.9 million Floridians are enrolled in Medicaid, with about 1.3 million already in managed-care plans, according to AHCA figures. That managed-care total likely would more than double under the legislation passed last week — and could go even higher based on the federal eligibility changes.

Among the largest HMOs in the Medicaid program are subsidiaries of Tampa-based WellCare Health Plans and Amerigroup.

Though it has stayed out of Medicaid, Blue Cross has long been an influential player in state legislative and political circles. For instance, it has a contract to administer part of the state’s employee health-insurance program and also is well-known for its clout when lobbying on insurance issues.

Michael Garner, president of the Florida Association of Health Plans, an HMO industry group, said he could not comment about Blue Cross or any individual companies.

But more broadly, he said last week’s legislation is a bigger factor for managed-care plans than the federal health law, which is being challenged in court by Florida and other states.

“I think a lot of (health) plans are really looking at the short term,” Garner said. “I think the federal expansion is still a question mark out there.”

Garner said the existing Medicaid managed-care market in Florida has become “pretty much a mature market.” With the legislation adding more potential customers, the market will be more appealing to companies taking on the financial risks, he said.

Also, Garner said the bill will provide predictability for companies. As an example, the managed-care plans that are selected in each of the 11 regions will get five-year contracts.

Negron said Blue Cross’ willingness to enter Medicaid “means that we did something right.”

“I think there’s a buzz in the marketplace that Florida’s Medicaid program is a great business opportunity,” he said.\

By Jim Saunders
The News Service of Florida

Comments

One Response to “Blue Cross And Blue Shield To Enter Florida Medicaid Program”

  1. JIM W on May 11th, 2011 1:01 pm

    They are smelling money and a lots of it. Otherwise they would stay out of the market. But it does give more choices for the consumer. Let’s just hope they stay in the market.

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