Insurers lose $73M in Kansas in 6 months thanks to Medicaid

Medicaid expansion under the Affordable Care Act has been an overall success for insurers in most states that have implemented it; however, the story is different in Kansas, which switched its entire Medicaid program to a private model.

Three insurers administering the Kansas Medicaid program--Amerigroup, UnitedHealthcare Community Plan and Centene's Sunflower Health Plan--lost almost $73 million in the first six months of the year. And they lost a total of $110 million in 2013, reported RH Reality Check.

"These companies can't keep subsidizing Medicaid to the tune of $100 or $150 million per year, and that's what's happening," said state Rep. Jim Ward (D), a member of a KanCare oversight committee, according to Kansas Health Institute.

One problem, however, that these and other Medicaid insurers face is that the Medicaid population tends to suffer from more expensive, chronic health conditions. Plus, new high-priced drugs, including the hepatitis C drug Sovali that costs $1,000 per pill, will challenge thin margins even more, FierceHealthPayer previously reported.

But the insurers aren't without fault. A report from the state's Department of Health Environment found that Amerigroup, UnitedHealth and Sunflower all failed to meet benchmarks to process claims within 60 days, RH Reality Check noted.

What's more, the Federal Bureau of Investigation is examining whether the three insurers provided financial compensation to members of Gov. Sam Brownback's (R) administration to win contracts to administer the state's $3 billion Medicaid managed care program.

As a result of the insurers' financial losses and the potential corruption allegations, some state lawmakers on the KanCare Oversight Committee have called for a special investigation into the program.

To learn more:
- read the RH Reality Check article
- see the Kansas Health Institute article

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