Private Power in Public Programs: Managed Care in Medicare and Medicaid

• In Event: Emerging Issues in the Politics of Public Health

Abstract

In 2016, Medicare and Medicaid provided health insurance coverage to a combined 130 million beneficiaries. The combined spending of these two public insurance programs approached $1.3 trillion. Interestingly, an increasing number of beneficiaries in both programs are enrolled in private managed care plans. Nearly 33% (or 19 million) of Medicare beneficiaries and 80% (65 million) of Medicaid beneficiaries receive their public health insurance benefits through a private managed care company. This trend has been accelerating rapidly, with managed care enrollment more than doubling in both programs in the last decade. This paper examines the expansion of private health insurance plans in both Medicare and Medicaid, a process that, for both programs, has occurred outside the direct legislative process. In Medicare, the increase is in large part a product of changes in the broader health care market, while the expansion of Medicaid managed care has been largely achieved through Medicaid waivers submitted by governors and approved by CMS. In addition, this paper explores the implications of this type of policy change both in regards to questions of democratic accountability and future policy change. As the role of private insurance companies expands inside two of the most critical public programs in the US, the increasing structural power of insurers promises to shape future programatic change.

Author

• Andrew S. Kelly, California State University, East Bay