Corporate health insurers are generating sizeable profits covering care for people with Medicare and Medicaid, sometimes called “dual-eligibles,” reports Caitlin Owens for Axios. The question is why these for-profit insurers are able to earn billions in profits from the dual-eligible population who generally need a lot of health care? Are the insurers withholding needed care inappropriately in order to pocket the money they don’t spend and maximize profits?
What’s noteworthy is that the largest corporate health insurers have moved big time into the Medicare and Medicaid health care markets. They clearly see big dollar signs in the Medicare and Medicaid markets. In fact, their profits for people with Medicare are projected to be two-thirds more than their profits for working people.
Of the 65 million Americans with Medicare about 13 million have both Medicare and Medicaid. Nearly four million of them are enrolled in corporate health plans that are supposed to cater to their special needs, called Medicare Advantage Special Needs Plans. All told, around seven million of them are enrolled in either a special needs Medicare Advantage plan or simply a Medicare Advantage plan that covers a broader array of people.
More than 11 million dual-eligible individuals have incomes under $20,000 a year. More than five million of them have long-term disabilities and are under 65. More than three milion of them have at least five chronic conditions.
McKinsey recently issued a report estimating that corporate insurers will see their profits grow treating dual-eligibles, increasing more than 70 percent to $12 million over the five year period ending in 2027. Why? The government pays more to treat dual-eligibles because they have costlier health care needs. But, insurers are clearly not spending proportionally more on this population.
Profit margins are particularly high for insurers covering dual-eligibles, according to MedPAC, and that’s especially true if the insurers attract dual-eligible enrollees who don’t receive a lot of care.
Here’s more from Just Care:
- People with both Medicare and Medicaid can get Traditional Medicare at little cost
- People with Medicare and Medicaid in Special Needs Plans at extra risk
- Medicare and Medicaid: How they work together
- 2023: Four things to know if your income is low and you have Medicare
- 2023: Five things to think about when choosing between traditional Medicare and a Medicare Advantage plan