Despite Utilization Creep, Medicaid Losses, MCOs Lift Earnings Estimates
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Aug 03, 2023
Government-focused publicly traded insurers reporting second-quarter 2023 earnings in July devoted a fair amount of discussion to the impact of Medicaid redeterminations on enrollment and rate adjustments, while analysts were interested in the recent trend of increased medical costs, particularly on the Medicare side. Despite these potential headwinds, the insurers appeared confident in their financial outlook for 2023, as all four raised their earnings projections for the full year.
After pausing eligibility verifications in exchange for receiving enhanced federal funding during the COVID-19 public health emergency (PHE), states were allowed to begin disenrolling people who longer qualify for Medicaid as of April 1. According to the latest update to AIS’s Directory of Health Plans, managed Medicaid enrollment as of June was nearly 73.4 million across 41 states, compared with 72.9 million a year ago — a decline that doesn’t yet fully reflect the impact of ongoing redeterminations. Nevertheless, some states have aggressively moved forward, prompting CMS to issue revised guidelines on best practices to avoid terminations driven by procedural reasons. Florida, for example, has already lost some 224,000 managed care enrollees (or close to 5%) from a year ago, according to DHP’s estimates.
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