Dive Brief:
- In Kansas, which has switched its Medicaid program to a private model, the three insurers administering the program are seeing dramatic losses.
- The insurers—Amerigroup, UnitedHealthcare Community Plan, and Centene's Sunflower Health Plan—lost nearly $73 million in the first six months of this year on the program, and a total of $110 million in 2013.
- Making money on this population can be tough, as members tend to suffer from more expensive, chronic health conditions, as well as sometimes needing new high-priced drugs like the $1,000-per-pill hepatitis C cure Sovali.
Dive Insight:
While there are probably clinical reasons why the insurers are having trouble paying for the Medicaid population's care, there are also hints of mismanagement and cronyism dogging the program, suggesting that there might be more to the losses than simply losing money on costly patients.
For one thing, a report from the Kansas Department of Health and Environment found that the three insurers had all failed to meet benchmarks to process claims within 60 days, suggesting that their financial house is not entirely in order. Meanwhile, the FBI is looking into whether the insurers paid off members of Gov. Sam Brownback's (R) administration to win the contracts to administer the state's $3 billion Medicaid managed care program. Until these issues are addressed, it will be difficult to know what the true source of the program's financial issues lies.