Medicaid and managed health care: enrollment in HMOs and other alternative health systems.

C. N. Oberg

Research output: Contribution to journalArticlepeer-review


In summary, Medicaid enrollment in HMOs has increased substantially in recent years following legislation which enhanced utilization of these managed health care plans. As of December 1985, there were over 600,000 Medicaid recipients enrolled in 92 HMOs in 21 states and the District of Columbia. Medicaid recipients represent only 3 percent of total HMO enrollment, but this percentage is certain to increase in the coming years. The Medicaid enrollees are in plans which are characteristically older and larger in size, with close to three-fourths in federally qualified HMOs. They are enrolled almost exclusively in HMOs in the West and Midwest regions. Medicaid enrollment in for-profit plans (48.7%) is a significantly larger proportion compared to the total HMO enrollment (35%). However, only 29.2 percent of Medicaid HMOs are for-profit compared to over 50 percent for total HMOs. The increased utilization by states of HMOs and other managed health care plans is partially driven by a need to control costs. Advocates of such systems, however, would also argue that the enrollment of Medicaid recipients into HMOs will eventually improve the quality care for these individuals. Certainly, the greater utilization of preventive services, which is a major incentive within the HMO model, should result in less acute and fragmented health care. The care provided by the HMO is designed to be coordinated and cost-effective. In addition, enrollment in HMOs would allow the Medicaid recipient to blend into the emerging competitive health care system. It would also provide incentives to dismantle the two-tiered health care infrastructure which has evolved over the past two decades. There are others who question the feasibility of the HMO model for this population. They voice concern about the the inability to articulate their health care needs. A recent Rand Corporation report from Seattle, Washington addressed such concerns and appeared to demonstrate poorer health and greater hospitalization for a low-income group enrolled in HMOs compared to the traditional, free, fee-for-service (FFS) care. These findings, however, should be viewed cautiously, since low-income enrollees that were included in the study were not allowed to make use of the HMO's program to educate recipients about how to access the system. This may have had a significant effect on the health outcomes experienced by the experimental group. It is imperative that additional studies be conducted. In addition, as we witness the increased utilization of managed health care by Medicaid recipients, an emphasis on education is essential not only for the recipients but for the providers as well.

Original languageEnglish (US)
Pages (from-to)49-62
Number of pages14
JournalGHAA journal
Issue number1
StatePublished - Jun 1987
Externally publishedYes


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