Increasingly, states are moving to private payers to provide care for their Medicaid population. Earlier this year, Iowa was one of the markets that went live w/three insurers (AmeriHealth, Amerigroup, and United Healthcare) that provided managed care for poor and disabled Iowans. How is it going? Two of the three payers are reporting significant losses (AmeriHealth-$42.6 million, Amerigroup-$66.7 million) while United has not yet reported financial data at this time. All three payers have made signficant monetary investments to start-up the Iowa plans and put in necessary infrastructure, these losses suggest members are utilizing healthcare services more than anticipated and are also sicker.
The question remains whether moving to managed care contracts will actually save the state government money in the long run. If these losses continue, it is extremely likely the insurers will attempt to renegotiate premium rates to further adjust to actual costs of servicing these members or could potentially pull out of Iowa all together.
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