Providers might not get rich from Medicaid, but some California payers are

Some insurance companies in California are bringing in billions of state Medicaid dollars, according to Kaiser Health News.

The finding is part of a KHN analysis of state data.

Here are seven findings from the analysis.

1. Data from health plans' unaudited financial statements show Anthem Blue Cross posted a profit of $549 million from California's Medicaid program, Medi-Cal, from 2014 to 2016. Health Net, which was acquired by Centene Corp. in 2015, posted a profit of $1.1 billion in the same period.

2. The analysis overall found 22 Medicaid insurers in California, which cover approximately 13.5 million state residents, posted profits of $5.4 billion from 2014 to 2016, according to KHN. The publication partially attributed the profits to higher rates California paid during the beginning of Medicaid expansion under the ACA.

3. For context purposes, KHN points out the Medicaid insurers in California brought in more profits than all Medicaid insurers combined in 34 other managed care plan states.

4. Jennifer Kent, California's Medicaid director, acknowledged to the publication health plan profits were higher than expected during the beginning of Medicaid expansion, but told KHN the state expects getting a lot of that taxpayer money back within the next year following the completion of audits and retroactive rate adjustments.

5. Medicaid insurers in California also acknowledged profits in the beginning of Medicaid expansion. However, they said those profits were after losses in prior years, and they noted medical cost increases could put them at risk of losses in the future, according to KHN.

6. KHN also looked at quality scores for Medicaid plans in California. The publication reports its analysis of state data found a number of Medicaid insurers fell short of a federal recommendation for medical spending in the year ending June 30, 2016. According to KHN, the federal recommendation is that 85 percent of Medicaid premiums go toward medical care and quality improvement. Out of the state's 22 Medicaid insurers, eight did not reach 85 percent. The analysis shows Anthem was at 77.1 percent while Health Net was at 80.9 percent. Kern Health Systems and Molina Healthcare were highest of the eight plans at 84.1 percent.

7. Democratic California Gov. Jerry Brown has signed a law mandating the 85 percent federal recommendation, although the law won't take full effect until 2023, according to the report.

Read the full report here.

 

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