Private Medicaid health plans lost hundreds of thousands of members last 12 months as pandemic protections that barred states from excluding anyone from the federal government program expired.
But despite the so-called Medicaid rollback, a minimum of two of the five largest publicly traded corporations selling plans continued to grow their revenue from this system, in keeping with their most up-to-date earnings reports.
“It's a very interesting paradox,” said Andy Schneider, a research professor at Georgetown University's McCourt School of Public Policy, that plans' Medicaid revenues are rising despite declining enrollment.
Medicaid, the federal health program for low-income and disabled people, is run by the states. But most individuals who enroll in this system receive their health care through state-mandated insurers, including UnitedHealthcare, Centene and Molina.
The corporations persuaded states to pay them extra money per Medicaid enrollee, assuming that younger and healthier people would drop out—presumably due to Obamacare coverage or employer-based medical health insurance, or because they didn't see the necessity for coverage—and Left behind to guard an older and sicker population, its executives have told investors.
Several of the businesses reported that states made mid-year and retroactive changes to their payments to plans to reflect members' deteriorating health.
In an April 25 conference call with analysts, Molina Healthcare CEO Joe Zubretsky said 19 states had increased their payment rates this 12 months to regulate for sicker Medicaid enrollees. “The states have been very responsive,” Zubretsky said. “We couldn’t be happier with the way our in-state customers have responded to keep rates in line with normal cost trends and trends impacted by the acuity shift.”
Health insurers faced great uncertainty through the elimination of Medicaid as states began reassessing enrollees' eligibility and removing from this system those that were deemed now not eligible or who had lost coverage on account of procedural errors. Before the dissolution, the plans said they expected their members' overall risk profile to extend as those that remained in this system would grow to be sicker.
According to KFF, UnitedHealthcare, Centene and Molina saw Medicaid revenue increases between 3% and 18% in 2023. The other two major Medicaid insurers, Elevance and CVS Health, don’t report Medicaid-specific revenue.
The five corporations' Medicaid enrollment rejected altogether KFF data shows that from the tip of March 2023 to the tip of December 2023 the number increased by about 10% from 44.2 million people to 39.9 million.
In the primary quarter of 2024, UnitedHealth generated Medicaid revenue rose to $20.5 billionin comparison with $18.8 billion in the identical quarter of 2023.
Molina on April 24 reported Medicaid revenue of nearly $7.5 billion in the primary quarter of 2024, up from $6.3 billion in the identical quarter last 12 months.
On April 26, Centene reported that Medicaid enrollment fell 18.5% to 13.3 million in the primary quarter of 2024 in comparison with the identical period last 12 months. The company's Medicaid revenue fell 3% to $22.2 billion.
Unlike UnitedHealthcare, whose Medicaid enrollment fell to 7.7 million in March 2024 from 8.4 million a 12 months earlier, Molina's Medicaid enrollment increased to five.1 million in the primary quarter of 2024 from 4.8 million in March 2023 purchased a Medicaid plan in Wisconsin and signed a brand new Medicaid contract in Iowa, the corporate said in its earnings release.
Molina 1 million members added because states were prohibited from ending Medicaid coverage through the pandemic. The company lost 550,000 of those employees through the liquidation and expects to lose one other 50,000 by June.
About 90% of Molina Medicaid members have passed through the redetermination process, Zubretsky said.
The corporate giants are also making up for enrollment losses by getting more Medicaid money from states, which they use to pass along higher payments to certain facilities or providers, Schneider said. By temporarily withholding the cash, corporations can record these “targeted payments” as revenue.
Medicaid health plans have been big winners through the pandemic after the federal government banned states from opting out of this system, resulting in a surge in enrollment to about 93 million Americans.
States have made efforts to limit health insurers' profits by clawing back some payments above certain thresholds, said Elizabeth Hinton, deputy director at KFF.
But when the ban on disenrolling Medicaid participants was lifted last spring, the plans began to falter. It was unclear how many individuals would lose coverage and when that will occur. Since the method began, greater than 20 million people have been faraway from the list.
Medicaid enrollees' health care costs have been lower through the pandemic, and a few states decided to exclude pandemic-era cost data as they considered the way to set 2024 payment rates. This was one other victory for Medicaid health plans.
Most states are expected to finish their Medicaid processing processes this 12 months.
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(KFF Health News is a national newsroom that produces in-depth journalism on health issues and is one among the core operating programs of KFF – the independent source for health policy research, surveys and journalism.)
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