Private Medicaid well being plans misplaced thousands and thousands of members previously yr as pandemic protections that prohibited states from dropping anybody from the federal government program expired.
But regardless of Medicaid’s unwinding, because it’s recognized, no less than two of the 5 largest publicly traded firms promoting plans have continued to extend income from this system, in accordance with their newest earnings experiences.
“It’s a very interesting paradox,” mentioned Andy Schneider, a analysis professor at Georgetown University’s McCourt School of Public Policy, of plans’ Medicaid income growing regardless of enrollment drops.
Medicaid, the state-federal well being program for low-income and disabled individuals, is run by states. But most individuals enrolled in this system get their well being care by insurers contracted by states, together with UnitedHealthcare, Centene, and Molina.
The firms persuaded states to pay them extra money per Medicaid enrollee below the belief that youthful and more healthy individuals had been dropping out — presumably for Obamacare protection or employer-based medical health insurance, or as a result of they didn’t see the necessity to get protection — abandoning an older and sicker inhabitants to cowl, their executives have informed traders.
Several of the businesses reported that states have made midyear and retrospective modifications of their funds to plans to account for the worsening well being standing of members.
In an earnings name with analysts on April 25, Molina Healthcare CEO Joe Zubretsky mentioned 19 states elevated their fee charges this yr to regulate for sicker Medicaid enrollees. “States have been very responsive,” Zubretsky mentioned. “We couldn’t be more pleased with the way our state customers have responded to having rates be commensurate with normal cost trends and trends that have been influenced by the acuity shift.”
Health plans have confronted a lot uncertainty in the course of the Medicaid unwinding, as states started reassessing enrollees’ eligibility and dropping these deemed not certified or who misplaced protection due to procedural errors. Before the unwinding, plans mentioned they anticipated the general threat profile of their members to go up as a result of these remaining in this system can be sicker.
UnitedHealthcare, Centene, and Molina had Medicaid income will increase starting from 3% to 18% in 2023, in accordance with KFF. The two different massive Medicaid insurers, Elevance and CVS Health, don’t get away Medicaid-specific income.
The Medicaid enrollment of the 5 firms collectively declined by about 10% from the top of March 2023 by the top of December 2023, from 44.2 million individuals to 39.9 million, KFF knowledge reveals.
In the primary quarter of 2024, UnitedHealth’s Medicaid income rose to $20.5 billion, up from $18.8 billion in the identical quarter of 2023.
Molina on April 24 reported almost $7.5 billion in Medicaid income within the first quarter of 2024, up from $6.3 billion in the identical quarter a yr earlier.
On April 26, Centene reported that its Medicaid enrollment fell 18.5% to 13.3 million within the first quarter of 2024 in contrast with the identical interval a yr in the past. The firm’s Medicaid income dipped 3% to $22.2 billion.
Unlike UnitedHealthcare, whose Medicaid enrollment fell to 7.7 million in March 2024 from 8.4 million a yr prior, Molina’s Medicaid enrollment rose within the first quarter of 2024 to five.1 million from 4.8 million in March 2023. Molina’s enrollment bounce final yr was partly a results of its having purchased a Medicaid plan in Wisconsin and gained a brand new Medicaid contract in Iowa, the corporate mentioned in its earnings information launch.
Molina added 1 million members as a result of states had been prohibited from terminating Medicaid protection in the course of the pandemic. The firm has misplaced 550,000 of these individuals in the course of the unwinding and expects to lose a further 50,000 by June.
About 90% of Molina Medicaid members have gone by the redetermination course of, Zubretsky mentioned.
The company giants additionally offset the enrollment losses by getting extra Medicaid cash from states, which they use to cross on larger funds to sure amenities or suppliers, Schneider mentioned. By holding the cash briefly, the businesses can rely these “directed payments” as income.
Medicaid well being plans had been huge winners in the course of the pandemic after the federal authorities prohibited states from dropping individuals from this system, resulting in a surge in enrollment to about 93 million Americans.
States made efforts to restrict well being plans’ income by clawing again some funds above sure thresholds, mentioned Elizabeth Hinton, an affiliate director at KFF.
But as soon as the prohibition on dropping Medicaid enrollees was lifted final spring, the plans confronted uncertainty. It was unclear how many individuals would lose protection or when it might occur. Since the unwinding started, greater than 20 million individuals have been dropped from the rolls.
Medicaid enrollees’ well being care prices had been decrease in the course of the pandemic, and a few states determined to exclude pandemic-era value knowledge as they thought of set fee charges for 2024. That supplied yet one more win for the Medicaid well being plans.
Most states are anticipated to finish their Medicaid unwinding processes this yr.
KFF Health News is a nationwide newsroom that produces in-depth journalism about well being points and is among the core working packages at KFF—an unbiased supply of well being coverage analysis, polling, and journalism. Learn extra about KFF.
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