IBX’s AmeriHealth Caritas lost money for the first time in five years as Medicaid enrollment declined
The Medicaid insurer, jointly owned with Blue Cross Blue Shield of Michigan, had its first annual loss since 2019.
IBX’s Medicaid unit, AmeriHealth Caritas, had a net loss of $199 million last year, a sharp swing from a $368 million profit in 2023. Enrollment declined as COVID-era Medicaid rules ended.
The loss, reported in the audited financials statements of Independence’s partner Blue Cross Blue Shield of Michigan, was the first for AmeriHealth Caritas since 2019, when the company lost $200 million.
Its five-year streak of double-digit revenue increases also came to an end, as Medicaid enrollment declines and a failure to win certain new state Medicaid contracts hurt results. The Newtown Square-based company’s revenue climbed just 3%, to $24.3 billion, last year.
In an emailed statement, AmeriHealth Caritas attributed last year’s disappointing financial results to industrywide challenges. During the federal COVID-19 public health emergency, individuals did not have to reapply for Medicaid benefits. They could keep the government-funded health insurance benefits even if they did not still qualify.
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In Pennsylvania, Medicaid enrollment ballooned from 2.2 million people in early 2020 to a peak of 3 million in the spring of 2023. By April, the statewide figure had fallen to 2.4 million. AmeriHealth Caritas’ enrollment had an even bigger percentage decline in Pennsylvania, its biggest market.
Insurance executives at AmeriHealth and other companies have said that the people who maintained Medicaid coverage were sicker on average than those who lost coverage. That meant that the rates the Medicaid insurers received from states didn’t reflect how much care Medicaid beneficiaries needed, according to the industry.
“We are working with our state partners to close the gap in 2025 as we remain focused on opportunities that ensure our members can get the care they need and stay well,” AmeriHealth Caritas’ statement said.
Now, AmeriHealth Caritas and other Medicaid management companies are facing the potential loss of many thousands more customers if Congress follows through with proposals to make it harder for people to keep Medicaid by imposing work requirements and making other changes to the program.