Medicaid offers insurers $40B of new opportunities

Medicaid is becoming a growth area for health insurers, which are now preparing to capitalize on $40 billion of new opportunities to run privately-managed Medicaid plans for states.

In 2014, the health reform law increases Medicaid by 16 million enrollees--and an additional $38 billion in revenue--and states are offering up many new bids or expansions to insure new members. In preparation, health plans are rolling out new programs to address the needs of long-term-care and disabled Medicaid enrollees, populations that some states already are adding, according to the Wall Street Journal.

"The Medicaid space is a significant long-term growth opportunity for us. It's a big market that's getting even bigger," said Gail Boudreaux, UnitedHealth's executive vice president, the WSJ reports.

Texas and Georgia will solicit new contracts for their private Medicaid plans early next year, while California, Florida and others are likely to meaningfully expand their programs. Texas's Medicaid program will grow by about two million people in 2014, the second-largest expansion after California. Texas soon will kick off the rebidding of its existing contracts, issuing a formal request for proposals from insurers, and contracts to manage various parts of the state likely will be awarded this summer.

Kevin Hayden, WellPoint's executive in charge of Medicaid, said he is moving forward to expand his company's Medicaid business, including meeting with new state governors' administrations to help shape programs for difficult populations.  

New state opportunities "seem to be popping up all over the place," says J. Mario Molina, chief executive of Molina, an insurer that specializes in government-sponsored plans. "The economy is still bad, and if you go into managed care, you will save money and you may be able to preserve benefits," he told the WSJ.

To learn more:
- read the Wall Street Journal article

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