Medicaid Managed Care: 2020 Results for the “Big Five”


By Andy Schneider, Allie Corcoran

February 23, 2021

Source: Georgetown University, Health Policy Institute, Center for Children & Families Photo / Image Source: Unsplash, Marcelo Leal

Corporate earnings statements for 2020 are now out. It was a very good year for the five largest health care companies in the Medicaid managed care market: Aetna/CVS Health; Anthem; Centene; Molina; and UnitedHealthcare. Each company experienced an increase in Medicaid enrollment between December 2019 and December 2020; in total, their Medicaid enrollment grew by 32%. We’re confident that Medicaid revenues went up as well, but not all of the companies reported those numbers. We also can’t tell whether Medicaid earnings were up and, if so, by how much. But none of the companies told its investors that it has any plans to exit the Medicaid market any time soon. To the contrary: several expect further growth in Medicaid enrollment and revenues in 2021.

Why does this matter? Together, these five companies owned 112 of the 281 Medicaid managed care organizations (MCOs) with which states contracted as of September 2020. Each company had subsidiaries in over 12 different states. And as of the end of 2020, according to parent company data, these MCOs were responsible for the delivery of needed health services to over 35 million Medicaid beneficiaries. Company enrollment figures are not broken down by age, but assuming children are enrolled in proportion to their enrollment in Medicaid, these MCOs cover an estimated 14 million children or more. If Medicaid is to work for children and families, these companies—and the other MCOs with which they compete—have to perform.

There’s little question about their financial performance last year. Across all health insurance markets—commercial, Medicare Advantage, Medicare Part D, Marketplaces, and Medicaid—the companies posted “operating income”/“earnings” from “operations”/“operating gain” totaling $28.1 billion—with a “b.” Each is in the FORTUNE 500, and in 2020, four ranked in the top 100: CVS Health (5), UnitedHealth Group (7), Anthem (29), and Centene (42). What follows is a brief summary of each company’s results for 2020 drawn from its most recent earnings statement. Market capitalization figures are current as of February 22, 2021.

Aetna/CVSHealth (Market Cap $ 91.8 billion) CVS Health has three segments; the Health Benefits Segment includes Aetna, which CVS Health acquired in 2018. Operating income for this segment in 2020 was $5.2 billion on total revenues of $75.5 billion. The company had 2.7 million Medicaid enrollees, who comprised 12% of its total enrollment of 23.4 million. Medicaid enrollment increased by 39%, or 767,000 beneficiaries, over the course of the year. The earnings statement does not provide any revenue or operating income information specific to Medicaid.

Anthem, Inc. (Market Cap $72.2 billion) Anthem reported an operating gain of $6.4 billion on total revenues of $121.9 billion. Its Medicaid enrollment was 8.8 million, or 21% of its total enrollment of 42.9 million. The company noted: “Government Business enrollment increased by 1.9 million lives compared to the prior year, attributable to Medicaid, reflecting organic growth as a result of the temporary suspension of eligibility recertification efforts in our markets as well as our acquisition of the Medicaid plans in Missouri and Nebraska and growth in Medicare Advantage.” (Medicaid enrollment accounted for 1.6 million of this increase).

Centene (Market Cap $33.8 billion). Centene reported earnings from operations of $3.1 billion on total revenues of $111.1 billion. Medicaid enrollment was 13.6 million, which represents a little over half of total enrollment of 25.5 million. Medicaid revenues were $74.8 billion, accounting for two thirds of Centene’s total revenues. Both Medicaid enrollment and revenues increased sharply in 2020; enrollment by 4.9 million or 56.7%; revenues by $22.9 billion, or 44%. The company attributed its overall revenue increase to “the acquisition of WellCare and growth in the Medicaid and Health Insurance Marketplace businesses, driven by expansions and new programs in many of our states. Additionally, the net effect of the pandemic increased our revenues due to the suspension of Medicaid eligibility redeterminations.”

Molina (Market Cap $12.9 billion) Molina reported operating income of $1.1 billion on total revenues of $19.4 billion. The company had 3.6 million Medicaid enrollees, who accounted for 89% of its total enrollment of 4.0 million. Medicaid revenues were $14.3 billion, over three quarters of total revenues. The company experienced growth in both Medicaid enrollment (up 22%) and revenues (up 14%) year-to-year. Molina also reported an MCR (medical costs as a percentage of premium revenue) of 87.4% for its Medicaid line of business; none of the other companies were equally forthcoming.

UnitedHealth Group (Market Cap $308.6 billion) UnitedHealth Group has two reportable business segments: UnitedHealthcare and Optum. The following results are for the health care benefits segment, UnitedHealthcare. Its earnings from operations on revenues of $200.9 billion were $12.4 billion, or 6.2%. Medicaid enrollment was 6.6 million, or 14% of UnitedHealthcare’s total enrollment of 48.4 million. “Community and State” revenues, which presumably include Medicaid revenues, were $46.5 billion, an increase of $2.7 billion from 2019. It expects “Medicaid growth with new market entries in Kentucky, Indiana, and North Carolina along with a strong proposal pipeline for both existing and new states” in 2021.

The companies’ earnings statements offer only a limited window into their Medicaid lines of business. Some do not even provide Medicaid revenues. And none specifies Medicaid operating income, so it’s not possible to determine from these data how profitable (or not) their Medicaid products are. Medicaid Managed Care Market Tracker.


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