Kansas Medicaid experiences $72 million setback
By - The three insurers administering Kansas Medicaid coverage lost $72.6 million in the first half of 2014. This is just the next step in a downward trend, as the KanCare system lost $110 million in 2013.
“These companies can’t keep subsidizing Medicaid to the tune of $100 or $150 million per year, and that’s what’s happening,” State Representative Jim Ward (D-Wichita), a member of the KanCare oversight committee, told the Kansas Health Institute. “At some point in time, these are for-profit companies,” Ward said. “They have boards of directors, they have people they report to.”
In 2013, KanCare shifted nearly all of the state’s 400,000 Medicaid patients to health plans provided by one of the three private payers. The federal government pays approximately 60 percent of the costs related to administering KanCare. Moreover, the private contracts were supposed to save the state $1 billion over the next five years, but the process has not been easy.
Amerigroup, UnitedHealthcare Community Plan and Sunflower Health Plan – a subsidiary of Centene – largely run the KanCare program, which was launched on Jan. 1, 2013 by Governor Sam Brownback. The three organizations reported approximately $96 million in underwriting losses in the first half of 2014, according to the news source.
The losses per group varied, with $24 million being reported by United HealthCare and $45 million acknowledged by Amerigroup. Additionally, Sunflower reported an approximate $27 million in losses. However, those numbers don’t include about $42 million in pay-for-performance bonuses received by the managed care organizations for their work in 2013.
Even so, the insurance companies remain committed to KanCare. Representatives from both Amerigroup and UnitedHealthcare told the Kansas Health Institute that they are still devoted to the program.
“We are committed to the success of KanCare, our partnership with the state and are proud of the programs we are delivering on to help more than 127,000 people live healthier,” said Molly McMillen Malat, a spokeswoman for United HealthCare.
The Kansas Department of Health and Environment (KDHE), which administers the KanCare contracts, will begin reviewing the per-client payment rates it provides to the MCOs this month, according to KDHE spokesperson Sara Belfry. This will determine if the rates need to be altered for 2015.
“The point Rep. Ward is missing is that people enrolled in KanCare have experienced the benefits of coordinated and integrated care,” Belfry said. “We have seen the benefits to consumers in a number of ways.”
