Follow the money for insurance corporation profits

Montana hospitals depend on payments from Medicare and Medicaid to stay afloat. Rural hospitals are especially reliant on payment from Medicaid and Medicare. In Dillon, Barrett Hospital provides services for a 60+ mile radius. About 60% of Barrett’s patients use Medicaid.

Medicare provides services to more than 67 million people over 65 and some younger people with disabilities. It is a federal program that does not generate a profit. Medicaid is income based and funded jointly by state and federal governments. For example, in Montana Medicaid is available for single adults with incomes up to $20,782. Medicare and Medicaid cover hospital payments (Part A), medical care (Part B), and prescription drugs (Part D).

Part C is a private for-profit insurance alternative to Parts A and B called Medicare Advantage. Private for-profit corporations like UnitedHealth, Humana and CVS, contract with the government to offer Part C Medicare Advantage plans. This is a hugely profitable business. Medicare Advantage accounts for about 82% of Humana’s revenues. Humana’s return on assets are calculated at 4.2% compared to 2.55% for all publicly traded companies. UnitedHealth controls almost a third of Medicare Advantage.

Private corporations get a per person, per month rate for each enrollee from the Centers for Medicare and Medicaid Services. These corporations aggressively advertise Advantage plans, using misleading and confusing tactics. People are enticed into signing up with a promise of “no premium” or through the offer of vision, dental and hearing. More than half of seniors eligible for Medicare have been “persuaded” to enroll in a private Part C plan. These private plans generate profit for the insurance corporation, at the expense of individuals and hospitals. Hospitals lose 20-30% on patients that use Medicare Advantage plans. These plans cost taxpayers 6% to 22% more per enrollee than Original Medicare.

UnitedHealth Group, the parent corporation of UnitedHealthcare, is the eighth largest corporation in the world measured by revenue. UnitedHealth profits hit $22 billion in 2023. UnitedHealth’s revenues increased by 14.6%, or $47.5 billion, to $371.6 billion, in 2023. It’s 2024 SEC Q3 filing reports revenues of $100.8 billion, up $8.5 billion year over year. About one-third of UnitedHealthcare revenues come from Medicare payments.

Montana had one of the highest rates of kicking eligible people off of Medicaid, forcing them to go without insurance or to re-enroll. More than 127,000 individuals lost coverage, more than 81,000 of whom were kicked off for failure to process paperwork. In the face of questions about its redetermination process, Montana’s DPPHS stopped updating its information dashboard. Montana has one of the lowest rates of enrollment in Medicare Advantage as a percentage of total Medicare enrollment. Removing people from Medicaid, and making it extremely difficult to re-enroll, creates an opening for insurance corporations. 

UnitedHealthcare profits from this, reporting: Total people served by the company’s state-based community offerings grew from the second quarter to 7.5 million, as the state-driven Medicaid eligibility redeterminations process concluded. The UnitedHealthcare team is continuing its comprehensive outreach to help families maintain, reinstate or find other affordable coverage.

Montanans can act, including:

Enroll in Medicare Parts A and B;

Report incessant advertising for insurance plans;

Be a partner with your physician and hospital. Ask how you can help make the insurance corporation pay for services you need;

Lobby to have Parts A and B cover vision, dental, and hearing.

We can ask elected representatives to champion these policies. We can vote with our wallets and our feet.

Monica Tranel is an attorney and former Democratic candidate for U.S. House. She lives in Missoula.