Medi-Cal is California’s Medicaid program.
More than 1 in 3 Californians, or 13.5 million people, are covered by Medicaid — more than the population of Pennsylvania. About 80% of those in California’s program are enrolled in a managed-care plan, in which insurers receive a fixed rate per person to handle their medical care. The goal is to control costs and better coordinate care.
In anticipation of the Obamacare rollout, officials in California and elsewhere boosted their payments to managed-care companies because they expected Medicaid costs to increase as newly insured patients rushed to the doctor or emergency room after going years without coverage. But those sharply higher costs didn’t materialize — and insurers pocketed more money as a result, especially in California. LATimes
W0w -Gigantic Profits!
Medicaid is rarely associated with getting rich. The patients are poor, the budgets tight and payments to doctors often paltry.
But some insurance companies are reaping spectacular profits off the taxpayer-funded program in California, even when the state finds that patient care is subpar.
Health Net, a unit of Centene Corp., the largest Medicaid insurer nationwide, raked in $1.1 billion in profit from 2014 to 2016, according to state data obtained by Kaiser Health News. Anthem, another industry giant, turned a profit of $549 million from California’s Medicaid program in the same period.
Overall, Medicaid insurers in the Golden State made $5.4 billion in profits from 2014 to 2016, in part because the state paid higher rates during the inaugural years of the nation’s Medicaid expansion under the Affordable Care Act, or Obamacare. Last year, they made more money than all Medicaid insurers combined in 34 other states with managed care plans. LATimes