Georgia's Department of Community Health has accepted the Medicaid managed-care bids of four insurers, three of which had already run the state's Medicaid program.
For the past several years, Georgia has contracted with Anthem, Centene Corp. and WellCare Health Plans to manage the care of its low-income population. Georgia awarded a contract (PDF) to each of those for-profit insurers as well as a new bidder, CareSource, a not-for-profit plan headquartered in Dayton, Ohio. Anthem will also continue to manage the Georgia Families 360 program (PDF), which covers children and young adults who are in foster care, adoption assistance or jail.
Georgia's Medicaid managed-care contracts, controversial among many critics, will go into effect July 2016 and still must be finalized. The four companies will cover about 1.5 million poor Georgians, and combined premium revenue exceeds $3 billion. The state has high rates of poverty and several counties with poor health outcomes. Some healthcare experts have wondered if the widespread and sustained shift to Medicaid managed care is benefiting the low-income beneficiaries or insurers more.
Wall Street analysts said the contract win was most significant for Centene and WellCare, since they derive a larger percentage of their revenue and profit from the Georgia Medicaid business than Anthem. Josh Raskin, an analyst at Barclays Capital, said the awards could be seen “as a very large sigh of relief for WellCare, a modest relief for Centene and somewhat uneventful for Anthem.”
WellCare, which also won the new Medicaid contract in Iowa, covers the most Medicaid lives, about 594,000, in Georgia. Centene and Anthem cover 405,000 and 334,000, respectively. The opportunity could be even larger for the companies if Georgia expands Medicaid eligibility under the Affordable Care Act, although that's unlikely in the near term due to the state's Republican leadership.
CareSource is expected to have 200,000 Medicaid beneficiaries in the state, which will eat into some of the incumbents' enrollment totals. CareSource CEO Pamela Morris said in a statement that the company was “thrilled” to have been picked and will start hiring people to handle the project. Roughly 200 employees will be added to an Atlanta office, and another 100 jobs will be created in its home base.