Connecticut moves to state-run Medicaid

Starting this year, Connecticut will no longer rely on private insurance companies to manage its low-income health care programs.

On Jan. 1, Connecticut assumed direct financial responsibility for its Medicaid, HUSKY and Charter Oak health care programs, which offer medical services to eligible low-income residents. This move represents a change from the state’s former policy of paying private health insurance companies such as Aetna and UnitedHealthCare to administer their low-income health care services. With this change, Connecticut became the second state in the nation to move away from private management of low-income healthcare.

“Our overall direction remains system change and improvement,” said Ben Barnes, secretary of Connecticut’s Office of Policy and Management, in a Sept. 29 press release announcing the decision to switch to a state-run program. “The current Medicaid system for seniors, people with disabilities and single adults in poverty offers no coordination or support to patients beyond paying for their care. By the same token, the managed care system in HUSKY can be confusing to enrollees and has been identified as overly profit-driven at the expense of taxpayers.”

Under the new “person-centered medical home program,” Medicaid, HUSKY and Charter Oak healthcare will be cumulatively overseen by a state-selected administrative services organization, Community Health Network of Connecticut Inc., a Wallingford-based non-profit organization.

Lieutenant Gov. Nancy Wyman said in the press release that the goal of the new program is to provide improved customer service for HUSKY and Medicaid enrollees while saving taxpayers’ money. Medicaid, HUSKY and Charter Oak represent the largest service expenditure in the state budget, said Wyman, adding up to approximately $4.6 billion.

In 2004 Oklahoma implemented a similar program, called Sooner Care. Mike Fogarty, chief executive officer of the Oklahoma Health Care Authority, a state agency, said that Oklahoma has been doing “extremely well” since the switch, citing the “extraordinarily low” rise of per-member total costs as 1.2 percent per year.

Fogarty added that Oklahoma transitioned to state-managed low-income healthcare after this after running both private and state-directed programs simultaneously and finding that patient satisfaction and quality care measurements were the same or higher for state-run services. He said that one challenge faced by Oklahoma’s state-run program was establishing credibility and connections with the healthcare network, which it has now achieved.

Stephen Frayne, senior vice president of health policy of the Connecticut Hospital Association, which represents the state’s hospitals and health care organizations, said that Connecticut hospitals do not expect to feel any negative effects from the change, as they have been working to make sure the transition takes place in a “budget-neutral way.” He added that the major challenge for the health care community will be “delivering the promise” of institutionalized, quality health care at low costs.

Aetna spokesman Matthew Wiggin, whose company used to manage Connecticut’s Medicaid program, said Aetna was successful when it managed Medicaid for the state.

“From the beginning when Aetna entered Medicaid, we reduced costs by 1.2 percent in Connecticut Medicaid, while costs were rising [nationwide],” he said. “We were actually able to move down.”

When asked what might change for consumers as the state assumes control over low-income healthcare, Wiggins said Aetna’s large size allowed it to connect with the highest-risk members and enroll them in services to better their health.

16 percent of Connecticut residents are enrolled in Medicaid, according to statistics provided by the Kaiser Family Foundation, a non-profit health policy group.

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