This trend not only underscores the diversity of healthcare solutions embedded in Obamacare, but may also point to its future. In Medicaid, as in
Medicare, government is the single payer. It sets reimbursement rates for doctors and hospitals and sets enrollment terms so that members, once enrolled, stay enrolled.
Moreover, the programs are almost entirely free or at least very inexpensive for members. That ensures that they get a lot of healthy enrollees as well as those with heavy medical needs, a mix that makes the costs of the overall insurance pool relatively stable and predictable.
These factors and others eliminate many of the uncertainties that have bedeviled insurers in the exchange market, where the health profiles of customers have been hard to gauge and their movement into and out of health plans, sometimes to Medicare and Medicaid, has been vigorous.
"It seems that insurers are perfectly happy and prosperous competing in the markets where the government is the payer," observes
Andrew Sprung on his Xpostfactoid blog. He's right. Anthem, which has been quietly grousing about the elusive profits in the exchange market, also has been buying up Medicaid insurers —
acquiring Amerigroup, which operates Medicaid plans in 13 states, for nearly $4.5 billion in 2012, and Simply Healthcare, with nearly 200,000 Medicaid and Medicare members in Florida, for
$1 billion last year.
Medicaid specialty insurers such as Wellcare and Centene have done especially well, as
Bruce Japsen observed recently in Forbes. Medicaid managed care enrollment at St. Louis-based Centene
grew last year by more than 20%, to 5.1 million members in 24 states.
"Clearly, 2015 was a banner year," crowed its CEO, Michael Neidorff, in a conference call last week. No dissing of Obamacare was heard on the call.
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thanks, very helpful.