Is Medicaid the new moneymaker for insurers in California? - Sovereign Health Group
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Is Medicaid the new moneymaker for insurers in California?

Medicaid, viewed as a source of health coverage for millions of Americans from low-income backgrounds, seems to be the new money-spinner for insurers in California. With big names in the trade using the taxpayer-funded program to make billions, there is a growing perception of insurers being enriched by the poor.

A recent analysis of state data by Kaiser Health News suggests that Health Net – a unit of the largest American Medicaid insurer Centene Corporation – made a whopping $1.1 billion profit during 2014 to 2016. Anthem, another big player in the industry, reportedly reaped a bumper harvest of $549 million from the Medicaid program during the same period.

On the whole, the early years of Medicaid’s expansion under the Affordable Care Act (ACA) witnessed insurers across California engage in a money-making spree, especially from 2014 to 2016, when their net profits were estimated around $5.4 billion. In fact, in 2016, Medicaid insurers in the Golden State made more money than their counterparts combined in the other 34 states with managed health care plans. “California is being wildly open handed and excessively generous with insurers,” commented Alan Sager, a health-policy professor at Boston University, expressing utter dismay at the current situation in the state.

California’s Medicaid director Jennifer Kent said that the ACA expansion led to higher-than-anticipated health plan profits in recent years. However, Kent was confident that the state would recover a considerable sum of money within 2018, following the completion of audits and the finalization of retroactive rate adjustments. “We’re taking back billions of dollars. No one should think these plans just made off like bandits,” said Kent in a recent interview.

Impact of ACA expansion

Currently, Medicaid covers about 13.5 million Californians, which is more than the total population of Pennsylvania. Nearly 80 percent of the insured under the program in California are enrolled in a managed-care plan, which allocated a fixed commission per person to the insurers for managing their medical care. While during the initial phase of the ACA rollout, Californian officials increased payments to managed-care plan providers, expecting a spike in Medicaid costs with more newly insured patients seeking medical treatment. However, the costs didn’t increase as anticipated and insurance companies pocketed more money.

In the light of such a problem in the federal health care system, experts are concerned about the adverse impact on health coverage in the states of California, Illinois and New York that have engaged in aggressive coverage expansion in recent years. According to the 2017 report of the Mental Health America (MHA), more than 40 million Americans nationwide are affected by a mental health problem. The figure amounts to more than the combined population of Florida and New York. Leave alone physical health care, it is sad to note that 56 percent of adults battling mental health problems still do not have access to any kind of professional help or treatment.

Treatment for mental problems

The current mental health crisis in the U.S. is real and more Americans struggle with psychiatric problems than one can even imagine. According to the National Alliance on Mental Illness (NAMI), it is unfortunate that only 41 percent of adults with a mental problem in the country received treatment for their condition in the past year.

Common mental disorders like depression and anxiety can be treated with timely medical interventions. Some more serious ones, such as schizophrenia and bipolar disorder, which can’t be cured, can still be managed well through proper treatment. As a leading mental and behavioral health care provider, Sovereign Health of California offers a variety of customized therapies to treat psychological disorders.

Licensed clinicians at our world-class mental health treatment centers in California are trained to identify the underlying causes and prescribe customized treatments as well as group psychotherapy based on a patient’s requirements. Call our 24/7 helpline or chat online with one of our counselors for more details about our treatment programs.

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