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North Carolina advances privatization effort with request for Medicaid bids

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North Carolina advances privatization effort with request for Medicaid bids

North Carolina is accepting bids for new health plans as the state transitions to a privatized Medicaid program that could ultimately pay out $12 billion annually to private insurers, according to analysts.

The request for proposals is part of North Carolina's two-phase plan to privatize Medicaid, which is set to begin in 2019. Under the plan, private insurance companies will take over management of the state's Medicaid program through what the state is calling Prepaid Health Plans. North Carolina's Department of Health and Human Services will still oversee Medicaid, but the insurers will manage the health services, take on the financial risk, and work with providers to set contracts for services.

North Carolina is specifically seeking to privatize through Medicaid's managed care program, which allows states to contract the delivery of state-run healthcare to managed care organizations. States then pay insurers a monthly payment for every beneficiary that enrolls.

According to an Axios report, Barclay's analysts have estimated that North Carolina will pay $4,100 each year for an average enrollee, with a total annual value of $12 billion paid to insurers by the time the program is fully implemented.

The North Carolina DHHS said Aug. 9 that the goal of the transition is to move physical health, behavioral health and pharmacy services all onto one insurance card and under the same program.

North Carolina currently operates its Medicaid program on a fee-for-service model and is a late adopter of the managed care option, which some states have been using since the 1980s. According to a 2018 Kaiser Family Foundation report, 39 states already use the managed care program, and two-thirds of all Medicaid recipients are covered under it.

Bids will be accepted until Oct. 12, and the winners will be announced Feb. 4, 2019, pending approval by the DHHS and the Centers for Medicare and Medicaid Services.