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Medicaid Plans Too Successful For Own Good?

States have been having a tough time in recent years trying to make the federal Medicaid funding stretch farther. Some have resorted to limiting enrollment. Others have turned to managed care to the point where 1 in 3 beneficiaries now receive care through a health plan.

It seems to be working — perhaps too well. The Wall Street Journal reports that not only do costs appear to be stabilizing, but the health plans are raking in huge profits. One company, named Centene, records 1.2 million Medicaid members and revenue of $1.5 billion for 2005. Therein lies the problem. Detractors who say private industry should not be involved in a public program complain that some of that profit has been earned at the expense of patient care. The Journal notes that Centene has helped to fund a multimillion-dollar arts center in St. Louis, and has financed a stadium for a minor league baseball franchise.

All of which fails to impress Jerry Flanagan, health care policy director for the Foundation for Taxpayer and Consumer Rights, an advocacy group. "What's good for shareholders is bad for patients," he tells the Journal.

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