Michigan | Winter | 2010 | Health Plan Analysis

The Michigan agency that oversees Medicaid has elected to expand the pharmacy carve-out for psychotropic drugs, taking the responsibility away from the state's Medicaid HMOs. The advantage to the state is the ability to recoup better rebates from pharmaceutical manufacturers, saving the state some money. For the health plans, however, they will lose the revenue they would have received for managing the administration of the psych drug claims. The Medicaid plans may come out ahead, though. Later this year, two new classes of Medicaid member will be deemed for mandatory managed care enrollment: foster children, and the dual-eligibles. A number of the MCOs are already managing the dual-eligibles in Medicare Advantage special needs plans.

On Jan. 1, 2010, the United Auto Workers assumed responsibility for providing health benefits for the hourly retired workers from General Motors Corp, Ford Motor Co. and Chrysler LLC. Some myths surround the launch of the union-run trusts, known as voluntary employees' beneficiary associations, or VEBAs. The first is that there were no big changes on Jan. 1; indeed there were. The other is that the trusts are being operated as a bloated bureaucracy pushing cushy benefits. In fact, a lean staff has unified slimmed-down benefit packages for all retirees, and is carefully considering its next moves as it tries to put the purchasing power of 875,000 members to work making the trust finances sustainable.
Medicare Advantage held its annual election period and the exodus has begun from the private fee-for-service product. Blue Croos Blue Shield of Michigan sustained losses of over 190,000 members as it shut down two PFFS plans, but most of them remained Blue Cross customers as they signed up for Medicare supplemental plans. That didn't stop Priority Health and other Michigan MA carriers from making gains in enrollment.