Making money from Medicaid? Not likely

In this recently published piece, American Enterprise Institute (AEI) health care business expert J.D. Kleinke explains that insurance companies that are rushing to acquire Medicaid managed care companies at above-market prices are chasing "fools' gold."

  • More patients does not mean more money: Although 8 to 16 million more patients (including 9 million "dual eligibles" who will be forced off Medicare to the cheaper Medicaid) will added to the Medicaid rolls by the Affordable Care Act (known as Obamacare), Medicaid remains the poorest, toughest segment of our health care system which has numerous challenges that make financial losses seem a certainty.
  •  
  • Even if they win, they lose: Kleinke explains that even if a company is somehow able to find a way to make a profit, they will be driven into failure by governments squeezing the profits out of the insurance companies, and vilified by the public as profiting off the poor.

 

"The health insurers already got a face full of cold water with this under Obamacare: new administrative cost and profit margin regulations set at completely arbitrary numbers. Those numbers will appear generous when the Medicaid gold proves to be nothing more than a very big flash in a very broken pan."  -- J.D. Kleinke, AEI

Read the full piece here.

J.D. Kleinke is a resident fellow at AEI and is an expert on health care business strategy.  He can be reached at [email protected] 

For additional help, other media inquiries, or to reserve AEI's in-house TV studio or ISDN facilities, please contact:

TV Jesse Blumenthal [email protected] / 202.862.4870

Radio Michael Pratt [email protected] / 202.862.5823

Print or Web Jesse Blumenthal [email protected] / 202.862.4870, Michael Pratt at [email protected] / 202.862.5823, or Veronique Rodman at [email protected] / 202.862.4871

Follow @AEInews

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

J.D.
Kleinke

What's new on AEI

In year four of Dodd-Frank, over-regulation is getting old
image Halbig v. Burwell: A stunning rebuke of a lawless and reckless administration
image Beware all the retirement 'crisis' reports
image Cut people or change how they're paid
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Monday, July 21, 2014 | 9:15 a.m. – 11:30 a.m.
Closing the gaps in health outcomes: Alternative paths forward

Please join us for a broader exploration of targeted interventions that provide real promise for reducing health disparities, limiting or delaying the onset of chronic health conditions, and improving the performance of the US health care system.

Monday, July 21, 2014 | 4:00 p.m. – 5:30 p.m.
Comprehending comprehensive universities

Join us for a panel discussion that seeks to comprehend the comprehensives and to determine the role these schools play in the nation’s college completion agenda.

Tuesday, July 22, 2014 | 8:50 a.m. – 12:00 p.m.
Who governs the Internet? A conversation on securing the multistakeholder process

Please join AEI’s Center for Internet, Communications, and Technology Policy for a conference to address key steps we can take, as members of the global community, to maintain a free Internet.

Thursday, July 24, 2014 | 9:00 a.m. – 10:00 a.m.
Expanding opportunity in America: A conversation with House Budget Committee Chairman Paul Ryan

Please join us as House Budget Committee Chairman Paul Ryan (R-WI) unveils a new set of policy reforms aimed at reducing poverty and increasing upward mobility throughout America.

Event Registration is Closed
Thursday, July 24, 2014 | 6:00 p.m. – 7:15 p.m.
Is it time to end the Export-Import Bank?

We welcome you to join us at AEI as POLITICO’s Ben White moderates a lively debate between Tim Carney, one of the bank’s fiercest critics, and Tony Fratto, one of the agency’s staunchest defenders.

No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.