March 31 marked the end of the ninth quarter of the COVID-19 Public Health Emergency (PHE). First declared by the Secretary of HHS on January 31, 2020, the PHE has subsequently been extended nine times, through July 15. As long as the PHE is in place, states qualify for an additional 6.2 percentage points on their federal Medicaid matching rate provided they don’t disenroll anyone covered by the program as of March 18, 2020. Continuous eligibility during the PHE has been a boon for beneficiaries, the providers that treat them, and state budgets. And, as earnings reports for the quarter ending March 31, 2022 make clear, it has been a significant benefit to the five largest publicly held Medicaid managed care companies as well.
The Big Five reported year-to-year gains in Medicaid enrollment ranging from 8.7 percent (Aetna CVS) to 19 percent (Anthem) (Table 1). Three of them—Centene, Molina, and UnitedHealth Group—also reported year-to-year increases in Medicaid revenues ranging from 19.2 percent to 23.6 percent. (For whatever reason, Aetna/CVS Health and Anthem, which between them have over 13 million Medicaid enrollees, elected not to provide Medicaid revenue results).
These enrollment and revenue increases were not all attributable to continuous eligibility during the PHE; acquisitions and state procurements also played a role. But the reports that the companies file with the Securities and Exchange Commission make clear that it is an important factor. Molina reported that its 750,000 increase in Medicaid enrollment from Q1 2021 to Q1 2022 “was mainly due to the suspension of redeterminations for Medicaid eligibility. We expect Medicaid enrollment to continue to benefit from the extension of the PHE period, and the associated pause on membership redeterminations, at least through mid-July 2022.” And Anthem, explaining its $5.8 billion, 18 percent year-to-year increase in operating revenues from all lines of business, stated that the increase was “primarily driven by higher premium revenue due mainly to organic membership growth in our Medicaid business resulting primarily from the continued temporary suspension of eligibility recertification during the COVID-19 pandemic.”
This PHE enrollment and revenue effect is not just a Q1 2022 phenomenon. In fact, one way to think about Q1 2022 is to view it as PHE Q9. As Figure 1 shows, each of the Big Five has seen enrollment increases in each of the nine quarters since the PHE was first declared, retroactive to January 1, 2020. (Because Aetna/CVS Health and Anthem are not transparent about their Medicaid revenues, we do not present quarter-by-quarter revenue trends over this period for all five companies). Indeed, while overall Medicaid enrollment increased 23.1 percent between March 2020 and December 2021 (from 64.9 million to 79.9 million), the Big Five’s Medicaid enrollment increased by a whopping 32.5 percent (from 30.1 million to 39.9 million).
We are now in the middle of PHE Q10, a/k/a Q2 2022. Stipulating that past performance is no guarantee of future results, the Big Five are likely to see yet another increase in Medicaid enrollment and revenues, both individually and collectively, this quarter. Whether the current PHE declaration will be extended beyond July 15, and if so for how long, is anyone’s guess (we’re betting that it is extended through the end of the year). But if the PHE is extended, enrollment and revenue in Medicaid managed care organizations (MCOs) will likely continue to grow in each quarter that continuous eligibility remains in effect.
As a line of business, Medicaid seems to be working nicely for the Big Five and their shareholders. So how well are the Big Five MCO subsidiaries working for beneficiaries? That’s hard to say. Performance information for individual MCOs is not in the 10-Q reports, and there’s no comparable periodic public filing for Medicaid MCOs at the federal level. Last year we searched the websites of 13 state Medicaid agencies and 56 MCOs including 37 Big Five subsidiaries, for plan-specific performance data relating to child and maternal health. We found very little. Only one of the states we looked at—Iowa—posts MCO-specific data about the use of EPSDT screening services for children.
The Big Five are health care stewards for 41 million low-income Americans. For carrying out this responsibility, three of them received over $45 billion from Medicaid in the first three months of this year. Given the scale and importance of these enterprises, the lack of transparency about the performance of their subsidiaries is inexplicable. The MCOs have the data. The state Medicaid agencies have the data. CMS has the data (or access to it). Only the public does not (except in Iowa).
Fortunately, a simple, low-cost solution is hidden in plain sight: CMS should post the MCO-specific performance data it receives from the states. No additional administrative burden on the states (even though they should be posting this data). No additional administrative burden on the MCOs (even though they should be posting this data). Just one-stop transparency, courtesy of the federal agency that funds two-thirds of all Medicaid costs. Who knows? Even some of the financial analysts and investors might be interested in how their companies are doing. We certainly are.