Stop Wall Street Buying Medicaid & Medicare

The federal government gave nine big health insurance companies a $20 billion "bailout" last year.  That's how much those companies saved off the top of new Medicaid and Medicare HMO contracts.

Income from Medicaid and Medicare HMOs grew an average of 35% last year for Amerigroup, Centene, Coventry, Humana, Molina, UnitedHealth Group, Wellcare and Wellpoint, to $111 billion.  Offiicial corporate policies are to spend as little of each premium as possible on actual patient care. 

These companies strive to achieve the lowest possible Medical Loss Ratio, the percentage of premiums spent on actual services.  Most state and federal contracts do not require minimum MLRs.  As a result, life and death decisions on medical care are being made based o profit, not need.

We're asking the Department of Justice Civil Rights Division, CMS/DHHS and DOE to work together to ensure these federal funds are spent as they are intended and not diverted into corporate profits.

Wall Street's share of Medicaid and Medicare was up 35% in 2010 over 2009, amounting to over $111 billion. Net earnings for some companies actually rose as high as  81%. Seven of the nine companies I've been tracking bragged in their 2010 SEC filings about the $19.5 billion saved off the top of federal and state Medicaid and Medicare contracts by lowering the amount of every premium dollar spent on actual costs.

UnitedHealth tried to explain away 2010's skyrocketing profits by saying it was because people didn't have the money for copayments, so they weren't going to the doctor.  But commercial premium revenue was up only one percent: the company's twenty-one percent increase in net earnings was tied more closely to the 24% increase in Medicaid (where there are no copayments!) and 12% increase in Medicare managed care premiums, combined with a two percent reduction company-wide in the Medical Loss Ratio (MLR).

Every penny saved against that MLR, the percentage of the monthly managed care premium received that is actually spent on medical services, exacts a human toll.  These capitation fees are paid out by the government to provide people whose health care needs put them at risk of death or institutionalization without the services and medications they need to stay healthy and home with their families. 

Care for this population routinely consumes two-thirds of any individual state's total Medicaid budget.
The 13.7 million Americans who now receive Medicaid through one of nine publicly trade corporations used to receive their services through state-run plans that paid the actual medical bills incurred, a system called "fee for service." 

When a "fee for service" budget is handed over to a private insurer, the carrier is seldom under any legal obligation to pay out a minimum percentage for actual services.  When a company such as UnitedHealth reports paying less than eighty cents out of every dollar, it means that the person with disabilities whose budget it is has had their medical costs cut by an average of twenty percent.

Long-term medications are suddenly denied payment.  One young adult I know has had twenty-two medications denied payment since January and now requires dialysis.  

Nursing services are abruptly cut, with no consideration to medical needs.  In Florida, the governor simply announced he was cutting rates paid to Medicaid caregivers by 15%, a move that cuts actual services to the state's disability community by up to 40% while saving the new Medicaid HMO companies a bundle.

These are cuts that target average middle class American families who are trying to care for loved ones at home, rather than relinquishing them to institutions. 

One division of the US Department of Health and Human Services regulates Medicaid and Medicare, and signs the checks.  Another division tracks abuses to the civil rights of people with disabilities that are tied to reductions in Medicaid and Medicare services.  Since February 2009, DHHS and the US Department of Justice Civl Rights Division have intervened publicly in at least sixteen states on behalf of victims of inappropriate if not illegal Medicaid service cuts.  All but two of those states have turned much of their Medicaid program into contracts with for-profit companies like Amerigroup, Centene, Coventry, Humana, Molina, Wellcare, Wellpoint and UnitedHealth. 

How many investigations and whistleblower complaints in how many states does it take for a problem to become a national epidemic?  It's a national problem, with national implications, and requires national solutions.  We are petitioning the Secretary of Health and Human Services, the Secretary of the Department of Education and the Assistant Attorney General for Civil Rights to put an end to the selling of Medicaid and Medicare to Wall Street.  How it is accomplished, whether through injunctions or regulations or a combination of the two, matters not. 

It is a horrible waste of money and lives, and It must be stopped.

(For privacy reasons, the photo is of another little boy, Mycal Johnson, who died in July 2009 after Medicaid denied his prescribed medications.)

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