Private Medicaid health plans lost millions of members last year as pandemic protections that prevented states from removing anyone from the government program expired.
But as it is known, despite the end of Medicaid, at least two of the five largest publicly traded companies that sell plans have continued to grow revenue from the program, according to their latest earnings reports.
“It’s a very interesting paradox,” said Andy Schneider, a research professor at Georgetown University’s McCourt School of Public Policy, about the plans’ increase in Medicaid revenue despite declining enrollment.
Medicaid, the state-federal health program for low-income and disabled people, is administered by the states. But most people enrolled in the program get their health care through insurers contracted by states, including UnitedHealthcare, Centene and Molina.
The companies persuaded states to pay more money per Medicaid enrollee under the assumption that young and healthy people were opting out—perhaps for Obamacare coverage or employer-based health insurance, or because they needed to get coverage. Not visible – left behind Their officials have told investors that the aging and sick population will have to be covered.
Many companies said states have made mid-year and retrospective changes in the payouts of their plans keeping in mind the deteriorating health condition of members.
In an earnings call with analysts on April 25, Molina Healthcare CEO Joe Zubretzky said 19 states have increased their payment rates this year to adjust for sicker Medicaid enrollment. “States have been very sensitive,” Zubretzky said. “We could not be more pleased with the way our state customers have responded with rates being in line with general cost trends and trends that are impacted by acuity shifts.”
Health plans have faced much uncertainty during the Medicaid expiration, as states have begun to reevaluate the eligibility of enrollees and remove those who are no longer deemed eligible or who have lost coverage due to procedural errors. Lost it. Before closing, the plans said they expected the overall risk profile of their members to increase as more people remaining in the program became sicker.
UnitedHealthcare, Centene and Molina see Medicaid revenues increasing by 3% to 18% in 2023, according to KFF. Two other large Medicaid insurers, Alleviance and CVS Health, do not break down Medicaid-specific revenues.
Medicaid enrollment of five companies collectively refused KFF data shows a nearly 10% increase from the end of March 2023 to the end of December 2023, from 44.2 million people to 39.9 million.
In the first quarter of 2024, UnitedHealth’s Medicaid revenues increased to $20.5 billionUp from $18.8 billion in the same quarter of 2023.
Molina reported on April 24 about $7.5 billion in Medicaid revenues in the first quarter of 2024, up from $6.3 billion in the same quarter a year earlier.
On April 26, Centene reported that its Medicaid enrollment in the first quarter of 2024 fell 18.5% to 13.3 million compared with the same period a year earlier. The company’s Medicaid revenue fell 3% to $22.2 billion.
Unlike UnitedHealthcare, whose Medicaid enrollment fell from 8.4 million a year earlier to 7.7 million in March 2024, Molina’s Medicaid enrollment increased in the first quarter of 2024 from 4.8 million in March 2023 to 5.1 million. Molina’s enrollment surge last year was partly the result of it purchasing a Medicaid plan in Wisconsin and securing a new Medicaid contract in Iowa, the company said in its earnings news release.
Molina added 1 million members Because states were prohibited from ending Medicaid coverage during the pandemic. The company lost 550,000 people during the closing and expects to lose an additional 50,000 by June.
About 90% of Molina Medicaid members have gone through the redesignation process, Zubretzky said.
Schneider said corporate giants compensate for enrollment losses by getting more Medicaid money from states, which they use to give higher payments to certain facilities or providers. By holding the money temporarily, companies can count these “directed payments” as revenue.
Medicaid health plans were big winners during the pandemic, when the federal government blocked states from removing people from the program, increasing enrollment by about 93 million Americans.
Elizabeth Hinton, an associate director of KFF, said states attempted to limit health plans’ profits by withholding payments above certain thresholds.
But once the moratorium on dropping Medicaid enrollment was lifted last spring, plans faced uncertainty. It was not clear how many people would lose coverage or when that would happen. Since the lockdown began, more than 20 million people have been removed from the list.
Medicaid enrollees had lower health care costs during the pandemic, and some states decided to exclude pandemic-era cost data as they considered how to set payment rates for 2024. This marked another victory for Medicaid health plans.
Most states are expected to complete their Medicaid unwinding processes this year.
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