Redeterminations could be shaking up margins in the Medicaid business, payer executives warn.
At a conference on May 29, UnitedHealth Group CEO Andrew Witty said the insurer is "watching" its Medicaid business.
"We've come through this prolonged redetermination cycle in Medicaid. Making sure the utilization, and the rate and everything else stay in perfect synchronicity during a multiquarter cycle — there's probably going to be some disturbance around that," Mr. Witty said.
Share prices for UnitedHealth and other insurers fell following Mr. Witty's comments, Bloomberg reported May 29.
In an regulatory filing published May 29, Centene reported Medicaid claims were higher than expected in April. Early data from May shows costs are still elevated, Centene said. The company did not revise its earnings guidance or projected medical loss ratio for 2024 based on the rising cost trend.
In April 2023, states began the process of disenrolling Medicaid members for the first time since 2020. Rules put in place during the COVID-19 emergency prevented states from removing members from their Medicaid rolls.
As of May 23, 22.4 million people have been disenrolled from Medicaid through the redetermination process, according to KFF.
The process is throwing off economics for insurers, Wall Street Journal columnist David Wainer wrote May 29. If Medicaid managed care organizations keep losing members, but the enrollees they retain use healthcare at a high rate, it could hurt margins.
Every major insurer has reported rising medical costs in Medicare Advantage, coupled with lowered reimbursement rates from CMS. UnitedHealth Group executives have said they are prepared to weather the new MA environment, but competitors CVS Health and Humana have said they will have to exit markets and cut benefits to adjust.
"Insurers were already having a rough year with government programs," Mr. Wainer wrote. "The latest comments from the industry's largest company suggest the trouble is far from over."