Analysts: For-profit payers to grow Medicare, Medicaid businesses regardless of health law

Large for-profit health insurers can still run profitable Medicare and Medicaid businesses depsite whether senators pass the Republican healthcare bill this summer, analysts told CNBC.

Following the GOP's decision to postpone voting on the Better Care Reconciliation Act, Citi analysts issued a buy rating for Hartford, Conn.-based Aetna and Louisville, Ky.-based Humana. They said the companies have the potential to increase profits from their government businesses. 

Medicaid represents 13 percent of Aetna's revenue, the report states. The payer aims to increase that following recent managed care contract wins in Nevada and Virginia. As for Humana, Medicare reflects roughly 80 percent of its revenue. Analysts predict the payer can still grow its Medicare business as more adults reach age 65 and qualify for the program.

In a research note obtained by CNBC, Citi analyst Ralph Giacobbe said, "When you step back from the uncertainty created by the current political landscape and consider the larger economics around how managed Medicaid helps states to save money and improve outcomes, it is likely to continue to be an indispensable piece of the solution for the future of healthcare."

For the full report, click here

More articles on payer issues:
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UnitedHealthcare to invest $18.3M in Michigan affordable housing complexes

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