How much are you worth to HMOs?
By Carol Gentry
Health News Florida, October 28, 2011Medicare health plan members are worth more than any other category of enrollee in a merger or acquisition deal, Wall Street analysts say.
In fact, they’re worth four times as much as members of employer-based plans and five times as much as members of Medicaid plans, according to a report from Goldman Sachs researchers Matthew Borsch and Samuel Wass.
By their calculations, Medicare Advantage (HMO or similar managed-care plan) enrollees have a “value per member” of $6,000 in a merger or acquisition.
That compares with $1,500 for commercial plans – the ones that employers offer but in which the insurer takes the financial risks – and $1,200 per member for Medicaid plans.
The researchers prepared the analysis in the wake of Monday’s announcement that Cigna will buy HealthSpring, a holding company that includes Medicare plans in 11 states and Washington, D.C. that encompass 340,000 members.
Other analysts have also noted the mega-insurers’ growing desire to acquire Medicare customers. As Carl McDonald of CitiGroup wrote today in a note about Universal American: “It’s hard to overstate how much the attitude of the largest plans …has changed toward the Medicare business in just the last six months.”
United Health Group was first to discover the pot of gold Medicare plans offered and bought PacifiCare in 2005, as McDonald notes, but now WellPoint, Cigna and Aetna are waking up.
http://www.healthnewsflorida.org/top_story/read/how_much_are_you_worth_to_an_hmo
Bet you didn’t realize that by signing up with a taxpayer-financed, private Medicare Advantage plan you can command a price of $6000 for the sale of yourself when your plan is acquired by another plan. Well, actually you don’t get the $6000. Neither does it revert to Medicare and the taxpayers. No, it goes to the top 1 percent, while leaving the 99 percent of us once again dumbfounded.
What price does a person in the traditional Medicare program command? What a ridiculous question. Medicare doesn’t buy and sell patients. That happens only when Medicare patients are privatized. Selling patients is a function limited to private plans, not public social insurance programs.
When are we finally going to say that we are not for sale to the 1 percent? Since it was Congress that arranged the sale, let’s Occupy Congress!