The Malloy Administration Tuesday announced sweeping changes to the state's Medicaid programs that will ultimately switch the state's plans for low-income and disabled residents to a self-insured model.
The move to a self-insured administrative services organization, which does not require legislative approval, will eliminate health insurance companies from state health care programs and require the state to assume the financial risk for the cost of a medical claim.
The change in health care administration will impact 600,000 residents including 165,000 seniors and younger adults, and 391,000 children and parents in Husky A, Husky B, and Charter Oak Health Plans.
State officials said the move could save the state tens of millions of dollars by reducing overhead costs and improving service delivery.
Connecticut currently spends $4 billion annually for its various Medicaid programs, which accounts for 20 percent of the budget.
"This will bring together the best parts of two parallel systems whose current structure makes it difficult to run an economical program that also delivers quality service," Lt. Gov. Nancy Wyman said at a press conference Tuesday afternoon. "The existing fee-for service system provides no support or guidance to patients beyond paying for their care, and the enormous managed care system for children and families carries unnecessary overhead that could be cut on behalf of taxpayers."
As part of the new model, Wyman said the state will also incorporate further the medical home concept and place a greater emphasis on the primary care physician to coordinate care.
The new self-insured system is scheduled to be ready by Jan. 1, 2012, Wyman said.
State officials have also approved a major expansion of the "Money Follows the Person" program for seniors and adults with disabilities.
In his budget address next week, Malloy will include funding to support the transition of 2,2251 nursing home residents to the community by the end of fiscal 2013. Malloy said he would like to see 5,200 seniors and adults with disabilities come out of nursing home care over the next five years.