Private Insurers Seek to Help States Manage Medicaid Expansion

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Apr 15th, 2010

Private Insurers Seek to Help States Manage Medicaid Expansion

The Wall Street Journal reports on plans by the health insurer UnitedHealth Group Inc. to issue a report on managed care strategies that "it says will help cash-strapped states solve budget problems and doctor shortages that hobble the government health-care programs for the poor." AmeriChoice, the company's Medicaid managed-care unit, is one of several in the country now vying to get it the expansion of Medicaid by looking to win contract bids from states to help run their public health programs.

UnitedHealth's strategy is to show states how much money the Minnesota-based insurer could help save them in running their programs.

“The company says $93 billion could be saved by adopting coordinated-care techniques to cut down on drug interactions and keep patients out of the emergency room. It finds $140 billion in savings by better coordinating long-term care and moving elderly patients from nursing homes and into home-based care. Another $133 billion could come from updating Medicaid's technology and infrastructure to reduce administrative expenses."

But financial experts say Medicaid contracts might not be enough to save the business from ensuing troubles caused by health reform. "Although the company has some diverse businesses – including a health information technology business that brought in over $2 billion in 2009 – the bulk of its $87 billion in sales comes from selling risk-based health plans that are likely to be less profitable under the overhaul" (Johnson, 4/15).

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