More on Medicare & Medicaid

Medicaid managed care grows, but financial performance varies, study says

Revenues since 2010 have more than doubled to $110 billion.

Since 2010, the number of risk-based Medicaid managed care health plans has increased from 150 to 182, according to a report by Milliman, as more states look to outsource the program as a way to reap savings.

Medicaid managed care revenues since 2010 have more than doubled to $110 billion, in part because of the growth of the approach as well as Medicaid expansion. In the meantime, the medical cost ratio -- the lower the number, the more profitable the plan -- has not increased by much. It stood at 85.3 percent in 2010, and last year averaged 86 percent.

That average, though, contains a large variability, with 111 of the health plans posting a profit and 71 posting a loss.

The medical cost ratios for the Medicaid managed care organizations, or MCOs, range from an average of 77.6 percent in Nevada, where UnitedHealthcare and Anthem subsidiaries both turned a profit, to 98.8 percent in North Dakota, where Sanford Health Plan, owned by the health system of the same name, lost money.

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“Healthcare delivery and premium revenue are believed to vary by geographic location,” wrote Milliman actuaries Jeremy Palmer Christopher Pettit in the report. “As such, it may be inferred that at least some portion of the financial results for an MCO is correlated with the geographic area in which the MCO is operating.”

The Milliman report also shows the major foray that provider-sponsored and directed health plans have made. Medicaid managed care presents an opportunity for health systems to take on risk. Of the 27 provider-sponsored plans in the report, 16 turned a profit in 2014.

In Wisconsin, all of the provider-sponsored plans except MercyCare posted a financial gain. In Pennsylvania, UPMC Health Plan made a profit while Geisinger Health Plan posted a loss. Kaiser Permanente Foundation Health Plan posted a loss in Maryland and Hawaii. The report’s data does not include California, the largest state.

Twitter: @AnthonyBrino