Privately Managed Medicaid Plans – $40 Billion Opportunity For Health Insurance Companies

Health insurers are preparing to capitalize on $40 billion of new opportunities to run privately managed Medicaid plans for the states, which would position insurers to benefit from the health overhaul’s expansion of Medicaid in 2014.
Medicaid, the state and federal program for the poor, has become a growth area for big insurers such as UnitedHealth Group Inc. and more specialized plans such as Molina Healthcare Inc. Texas and Georgia will solicit new contracts for their private Medicaid plans early next year, while California, Florida and others are likely to meaningfully expand their programs, companies and states have said.
In the next three years, states are offering up many new bids or expansions. In 2014, the health law increases Medicaid by 16 million enrollees, which means another roughly $38 billion in Medicaid revenue, according to Citigroup research. Right now, the firm estimates overall industry revenue at about $56.5 billion.