Aetna, UnitedHealth win Medicaid contract


Aetna and UnitedHealth, along with nonprofit insurers CareSource, Paramount Advantage and Meridian Health Plan, have won lucrative contracts to manage about 1.7 million recipients within Ohio's Medicaid program.

The decision, which unseats incumbent Medicaid insurers Molina Healthcare and Centene, is a boon for Aetna's business. This "marks the company's first major Medicaid contract win following a poor showing during 2011," Goldman Sachs analyst Matthew Borsch told The Wall Street Journal.

But losing the Ohio Medicaid contract means Molina will see 22 percent of its premium revenue and 30 percent of its profit disappear. Both Molina and Centene are expected to protest the decision, Bloomberg reported. "We believe there were fundamental flaws in the procurement process, and we plan to pursue all available remedies," said Jesse Hunter, executive vice president of operations at Centene.

As a result of the new contract, Aetna likely will open a call center in downtown Columbus, while Molina and Centene, which employ about 650 workers combined in Ohio, probably will leave by the end of the year, according to Columbus Business First.

To learn more:
- see the Wall Street Journal article (subscription required)
- read the Bloomberg article
- check out the Columbus Business First article

Related Articles:
Molina protests $1.1B 'illegal' Medicaid contract
Blue Cross lawsuit: State contract review was 'legally flawed'
Blue Cross challenges state's switch to UnitedHealth
Aetna disputes state's $6B Medicaid contracts
Aetna, Coventry challenge $2B Medicaid decision
UnitedHealth, Coventry bid for Kansas Medicaid contact