A very interesting story out of the USA Today this morning detailing Connecticut’s imminent termination of managed care plans to coordinate care for its patient population.

This is all the more interesting since Connecticut is also the insurance capital of the country with an estimated 2.1% of its residents employed in the insurance industry.

Beginning Sunday, Connecticut will jettison its private health plans from Medicaid, the state-federal health insurance program. Instead of paying the companies a set monthly fee to cover the health costs of more than 400,000 children and parents, the state will assume financial responsibility.

State officials say the companies, including Hartford-based Aetna, did not fulfill their promise of lower costs and better care.

“Connecticut has a 15-year history with managed-care organizations, and there has been a diminishing confidence in the value of what they are providing,” says Mark Schaefer, the state’s Medicaid director.

The key point I think I see in this story, but which I will need to do more research on, is it appears issues of plan network adequacy may have been prominent in the deliberations of state officials.  This point is a central concern for some in Washington state looking ahead to the implementation of the new Healthy Options contract.  It’s also one not easily explained in sound bites or through mainstream media, so awareness of this issue may be limited.

This move by Connecticut runs counter to many of the trends seen across the country where managed care strategies for Medicaid, run by plans contracted with the state, continue to be on the upswing.  Alaska, a state without a managed care plan for Medicaid, is seriously considering it.  Washington just closed its RFP process for a new contract.  The story notes that two dozen states are planning expansion of Medicaid managed care in 2012.

Nationally, managed-care plans oversee care for 27 million people enrolled in Medicaid and control $150 billion of the $400 billion in Medicaid spending — numbers likely to increase partly because of the influx of an additional 16 million people expected to be covered by the program beginning in 2014 under the national health care law.

Connecticut is only the second state in a decade to drop its for-profit managed-care plan. Oklahoma moved away from private plans in 2005, and officials there say they have no regrets. “While achieving very encouraging marks in both member satisfaction and quality, the cost per member has grown at a very low average annual rate of 1.2% over the last five years,” says Mike Fogarty, Oklahoma’s Medicaid director.