Q3 2020 closed on September 30, and publicly held companies have reported their financial performance. These reports, known as Form 10-Qs, are designed to provide investors with some transparency about the companies in which they are investing. Here’s what they tell us about how the five companies with the largest Medicaid managed care enrollments have done over the first nine months of this year, during eight of which a public health emergency has been in effect. Bottom line: the pandemic has been a growth proposition. Each of the companies has seen its Medicaid enrollment and revenues increase during this period. For states and pediatric practitioners, the fiscal impact of the pandemic has been notably different.

According to the Kaiser Family Foundation’s indispensable Medicaid Managed Care Market Tracker, as of March of this year, 38 states and the District of Columbia had contracts with a total of 290 managed care organizations (MCOs) to furnish services to Medicaid beneficiaries. Five publicly-held companies—Aetna, Anthem, Centene, Molina, and UnitedHealth Group—are the largest players in this market, accounting for 33.7 million Medicaid enrollees as of September 30. Their 10-Qs do not provide an age breakdown, but if children are enrolled in proportion to their enrollment in Medicaid overall (45%), that would make these companies stewards for the health care of over 15 million children, about half of the 30 million children enrolled in Medicaid

Over the first nine months of 2020, Medicaid enrollment for all five companies increased by 4.4 million. Combined Medicaid revenues for Aetna, Centene, Molina, and UnitedHealth Group for the nine-month period totaled $99.4 billion (Aetna and Anthem did not disclose their Medicaid revenues). Here are the results for each company as reported in its 10-Q filing, or, when that was not posted, in its quarterly earnings statement for Q3:

Aetna is owned by CVSHealth (market cap $85.4 billion); its financial results are reported as the Health Care Benefits segment of CVSHealth. Aetna operates Medicaid MCOs in 16 states. Aetna’s total Medicaid enrollment as of September 30 was 2.03 million, which reflects a growth of 630,000 since the beginning of the year. The 10-Q does not break out Aetna’s Medicaid revenues. Over the first nine months of 2020, operating income for the Health Care Benefits segment of CVSHealth was $5.1 billion, or 9.1% of revenues.

Anthem, Inc. (market cap of $68.7 billion) has Medicaid MCO subsidiaries in 18 states and the District of Columbia. As of September 30, Medicaid enrollment in Anthem plans totaled 8.57 million. That is an increase of 1.3 million from its Medicaid enrollment on December 31, 2019. Anthem’s quarterly earnings statement does not disclose its Medicaid revenues, but it does report net income of $4.021 billion on all its lines of business for the first nine months of 2020.

Centene Corporation (market cap of $33.8 billion) which describes itself as “the largest Medicaid managed care organization in the country,” has Medicaid products in 24 states. The company’s Medicaid enrollment grew from 11.8 million in Q1 (ending March 31) to over 13.1 million in Q3 (ending September 30), an increase of just under 1.3 million. During that same nine-month period, Centene’s Medicaid revenues were $54.2 billion. Its earnings from operations on all of its managed care business, of which Medicaid accounts for two thirds of revenues, were $3.014 billion.

Molina Healthcare (market cap $11.1 billion) owns MCOs in 12 states. Medicaid enrollment in all of Molina’s MCOs as of September 30 was 3.6 million, an increase of 639,000 from December 31 of last year. Over the first nine months of 2020, Molina’s Medicaid revenues were $10.4 billion. In a welcome act of transparency, Molina, unlike the other three companies, breaks out its medical costs as well as its premium revenue separate for its Medicaid, Medicare, and Marketplace products. For Medicaid, Molina’s medical costs were 86.3% of premium revenue for the first nine months of 2020.

UnitedHealth Group (market cap of $288.6 billion), operates Medicaid MCOs in 24 states through one of its two major divisions, UnitedHealthcare. For the first nine months of 2020, it reported a Medicaid enrollment gain of 535,000 across all of its subsidiaries, bringing its Medicaid enrollment to 6.43 million as of September 30. Medicaid revenues for the first nine months were $34.8 billion. Over this same period, UnitedHealthcare earned $11.9 billion on all of its health insurance lines of business, for an operating margin of 7.9%.

All in all, a fairly healthy bottom line during a recession.

The experience of states has been quite different. A recent National Association of State Budget Officers blog pretty much says it all: during the state fiscal year ending on June 30 (for most states), state revenues declined by roughly 6 percent, “with the worst still to come.” Our colleagues at the Center on Budget and Policy Priorities estimate that, without federal fiscal relief, state budget shortfalls could total $400 billion through 2022. Shortfalls of that magnitude put state policymakers, who must balance their budgets while combating the pandemic and high unemployment in an extremely difficult position.

Many pediatricians have also seen revenues decline. Because of the steep drop in routine well-child visits during the first few months of the pandemic, revenues for many fee-for-service pediatric practices fell sharply. A recent Commonwealth Fund report finds that, as of October 10, outpatient visits have generally returned to pre-pandemic levels, but visits by young children (ages 0-5) remain 10% to 18% below the numbers before the pandemic. This implies that for many pediatric practitioners, income losses continue, and that many children are going without needed care.

The Q3 results for the five companies described above do not necessarily reflect the results for other MCOs or even for any individual subsidiary of any of those companies. But the increase in company-wide Medicaid enrollment—and the accompanying increase in Medicaid revenues—is entirely consistent with the overall increase in Medicaid enrollment during the economic downturn triggered by the pandemic. And, barring an end to the coronavirus public health emergency and an economic recovery that reduces unemployment, Medicaid MCO enrollment, and Medicaid MCO revenues, are likely to continue to increase.

The prosperity of the managed care industry presents state policymakers with options for addressing their revenue shortfalls and helping pediatric providers stay in business so they can continue to meet children’s health care needs. These options will not come close to solving for all of the projected budget shortfalls—only another round of state and local fiscal relief from the federal government can do that—but every little bit helps, especially when it reduces the need for blunt program cuts that harm beneficiaries and providers.

At a minimum, state officials can take a close look at the financial condition of each MCO with which they contract to see whether adjustments can be made to help address state budget deficits. For example, in the case of subsidiaries of publicly held companies, it would be reasonable for state officials to ask what portion of their Medicaid revenues is flowing upstream to the national parent and whether that is reasonable in light of the state’s current budgetary circumstances. Similarly, if an MCO’s medical costs are less than 85% of its Medicaid revenues, the state agency should consider directing payments to pediatric and other primary care practitioners in order to mitigate their revenue declines.

Something is wrong with this picture, but there are solutions. State policymakers should put some of them to work to reduce the pressure on state budgets and ensure that children will have an adequate network of pediatric providers available to meet their needs going forward.

[Editor’s Note: This blog post has been updated to reflect Aetna/CVS Health’s results released on November 6.]