There is no getting around it.
Costs of providing care have increased due to labor expense and supply cost increases. If hospitals are hiring and paying people more than ever, and people are sicker than the pre-pandemic trend, more care must be delivered. There is just no getting around higher benefit expenses for the MCOs. ELV reported an 89.4% Benefit Ratio for 4Q which, had it not been for a one-time item, it would have been higher.
For now, the effect of these higher costs may be masked by the Medicaid PMPM paid for enrollees who have other coverage. In other words, as states stop paying those premium dollars there may not be a commensurate drop in benefit expense.
We will know more as reporting comes in on the end to Medicaid Maintenance of Effort.
Word on the street is chaos is likely to ensue.
Let me know what you think.
Emily Evans
Managing Director – Health Policy
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