At the very end of yesterday’s Medicaid Care Management Oversight Council meeting, DSS reported that the HUSKY HMOs made $18.8 million in profits on the program during 2009. This profit is on top of their administrative costs. Aetna made most of that profit — $14 million – despite having only one fourth of total enrollment. While the medical care ratio (better term than medical loss ratio) for the program overall was a respectable 90.7%, it varied considerably by program. Worst was 62% for AmeriChoice’s HUSKY Part B plan; none of the HUSKY Part B ratios would comply with federal Accountable Care Act standards.
As bad as the state’s loss of millions to HMO profits, worse is overcharging HUSKY families. There are currently 1,260 children in HUSKY Part B Band 3; these families are paying an extra $323.16 in premiums annually to HMO profits. Families in this band have incomes over 300% of the federal poverty level ($54,930 for a family of three) and pay the full cost of HUSKY coverage for their children. Even worse, 1,279 children lost HUSKY Part B Band 3 coverage in the last year because they couldn’t pay premiums. It is unknown how many of those children may have kept coverage if premiums were $323.16 lower and reflected only the HMOs’ costs.
The HMOs defense to criticisms about large profit taking was that the profits served to partially offset losses on the Charter Oak program. Council members pointed out that the state and CMS do not allow cost shifting between programs, especially from one that is federally matched to one that is supposed to be fully state and consumer funded. Advocates have been concerned for years that HUSKY rates are set at overly generous levels to subsidize the politically favored Charter Oak program.