Medicaid managed care: the last bastion of the HMO?

States rely on health maintenance organizations (HMOs) for their Medicaid beneficiaries because they offer guaranteed access to comprehensive benefits at a predictable cost. This is true despite movement away from HMOs, or at least the more restrictive variants, in the private sector. Plans that focus on Medicaid are becoming more central to states' programs as commercial plans exit. Publicly traded, Medicaid-focused plans are also emerging. Medicaid participating plans are aggressively managing costs and care, contrasting sharply with commercial insurance where the trend is toward less intrusive managed care. In this context, state Medicaid managed care programs are facing important policy challenges related to plan participation, mainstreaming, and product design.

Cutting back but not cutting out: small employers respond to premium increases.

Rising premiums and a weak economy are generating questions about the potential erosion of health insurance coverage, particularly for the more than 46 million Americans who work for small firms. People working in small firms typically have less access to coverage than those in large firms. In 2000 and early 2001, the Center for Studying Health System Change (HSC) conducted its third round of site visits to 12 nationally representative metropolitan areas and found that while few small employers actually dropped coverage, many increased the employee share of premiums, raised copayments and deductibles, switched products and carriers and/or reduced benefits. With the U.S. economy now in rougher shape, small employers may pare back coverage even more, putting affordable health care further out of the reach of workers and their families.