Crain's analysis: Michigan Medicaid HMOs increase profitability following expansion

April 16, 2016

An analysis conducted for Crain's Detroit Business says Medicaid HMOs in Michigan increased profitability significantly over the past two years under the ACA, largely due to the expansion of Medicaid to more than 619,000 people while giving additional funding to support them. It shows that profits rose for the HMOs by 627% on their Medicaid business lines to $298 million, or a 3.9% margin, for 14 plans in 2015 from $41 million, or 0.9% margin, in 2013, the year before the state expanded Medicaid under Obamacare. The Minneapolis-based healthcare consultant behind the analysis says Michigan is the first state to report full 2015 numbers, adding that several states are showing similar trends. He believes Medicaid HMOs will continue to post strong profits even as enrollment and rates flatten.