Pennsylvania's biggest Medicaid insurer is building political clout

Sep. 10—Listen to article —0:00 min

Medicaid is a multi-billion dollar business.

And the insurance company with the biggest piece of that business in Pennsylvania is making its voice heard in Harrisburg, Washington, and across the political landscape.

Newtown Square-based AmeriHealth Caritas, an affiliate of the Philadelphia-based healthcare giant IBX, contributed $500,000 total last year to national Democratic and Republican groups that work to elect governors and state legislators, more than double what it gave those entities in 2020.

As the GOP-led Congress passed legislation making deep cuts to Medicaid spending last year, AmeriHealth spent $1.7 million on federal lobbying, the most since at least 2008. And the company made charitable contributions aligned with causes promoted by political leaders in states where it does business — including a $5 million donation to food banks announced by North Carolina's Democratic governor and 250 book bags for schoolchildren as a gift to the Democratic speaker of the Pennsylvania House.

It all adds up to a growing influence operation run by a company in a competitive industry that relies on government for revenue. Last year, AmeriHealth generated almost $16 billion from Pennsylvania contracts — more than half its total revenue.

Medicaid — a joint state-federal program that funds healthcare for low-income people, children, seniors, and individuals with disabilities — is also the single biggest cost driver in Pennsylvania's budget. Almost 3 million Pennsylvanians, or more than one-fifth of the population, are covered by Medicaid.

AmeriHealth's corporate political giving has drawn criticism from some Republican state lawmakers, who call it an inappropriate use of taxpayer dollars.

"That's money that's supposed to be going out to our hospitals, pharmacies, and disabled service providers," said State Sen. Cris Dush (R., Jefferson).

AmeriHealth's increased political activity has come during a volatile period for Medicaid. Enrollment surged during the COVID-19 pandemic as a federal emergency declaration meant people didn't have to reapply for benefits, even if they no longer qualified. Once states resumed verifying eligibility, insurers including AmeriHealth saw membership decline — and those most likely to maintain coverage were sicker than average.

Now insurers are grappling with the biggest cuts to federal healthcare spending in history — $1 trillion over the next decade, mostly to Medicaid — in President Donald Trump's big domestic policy legislation last summer. They are set to take effect next year.

Lee Drutman, a senior fellow at New America, a Washington, D.C.-based think tank, said AmeriHealth's political activity is part of a "tried-and-true playbook" in corporate America.

"If you do business with the government or have contracts or regulatory interests, you want to make sure the people who are making the decisions have a nice warm feeling when they think about your company," said Drutman, author of The Business of America is Lobbying. "The best way to give them that nice warm feeling is to contribute to their campaigns and their causes."

AmeriHealth said in a statement that it reviews all political contributions to ensure compliance with applicable laws and regulations and that the company does not make contributions "from legal entities that have state or federal contracts."

AmeriHealth did not say what revenue source it uses to fund its corporate political contributions and did not answer questions about whether it had any revenue streams that were not tied to tax dollars.

"Our participation in the public policy process focuses on healthcare issues affecting our members and the communities we serve," AmeriHealth said, adding that it supports organizations across the political spectrum.

Donations to DGA and RGA

Like most states, Pennsylvania contracts with private insurers — also known as managed care organizations (MCOs) — to manage Medicaid beneficiaries' benefits.

Federal law sets broad coverage requirements, but states have flexibility in determining which populations are eligible and which services to include.

And every year, they set monthly rates they pay insurers for Medicaid enrollees. Federal regulators review the rates.

"That all has a huge impact on the financial health, the success of the Medicaid managed care plan," said Edwin Park, research professor at the McCourt School of Public Policy at Georgetown University.

It is not surprising, then, that insurers like AmeriHealth donate to political groups that elect governors and state legislators.

Among the groups that have benefited from AmeriHealth's giving is the Democratic Governors Association, which in 2022 gave $7.2 million to then-Pennsylvania Attorney General Josh Shapiro's successful gubernatorial campaign and which has given $750,000 to his reelection bid.

From 2021 through last year, AmeriHealth gave $250,000 to the DGA annually, up from $100,000 in 2020. It gave $250,000 to the Republican Governors Association in 2025, up from $100,000 each of the previous two years.

The donations put AmeriHealth in the top 10% of donors to each group in 2025, according to an Inquirer analysis of Internal Revenue Service data compiled by ProPublica.

The RGA has not invested in Pennsylvania's gubernatorial election this year, in which Shapiro is favored against Republican state Treasurer Stacy Garrity.

Pennsylvania law prohibits corporations and labor unions from making direct contributions to state campaigns, though those groups can form political action committees. PACs can raise funds from their employees or members and use that money to donate to candidates. AmeriHealth started a Pennsylvania PAC in 2022.

However, corporations and unions can use their treasury funds — drawn directly from profits or member dues — to give unlimited amounts of money to groups such as the DGA and RGA. Those groups can donate to campaigns that may otherwise face restrictions on receiving corporate money, as in Pennsylvania.

In response to written questions, neither AmeriHealth nor Shapiro's campaign would say whether the governor or his representatives had solicited contributions from the company on the DGA's behalf.

AmeriHealth did not answer a question as to whether it had asked the DGA to designate some or all of its contributions to Shapiro's race. Izzi Levy, a spokesperson for the DGA, said, "As a policy, DGA does not accept funds earmarked for any race or state."

"Corporations, labor unions, wealthy individuals want to have a powerful ally in a governor," said Michael Beckel, an expert on money in politics at Washington, D.C.-based Issue One, a group that advocates for campaign finance restrictions.

"Being able to give through a group like the DGA or an RGA is a way to help secure your position as a friend and ally, who then in turn might be somebody that [governors] listen to on policy matters," he said.

Many companies donate to these groups, but AmeriHealth's corporate contributions have caught the attention of Pennsylvania lawmakers, including Senate President Pro Tempore Kim Ward (R., Westmoreland).

"The money should be used as appropriated for Medicaid because we are struggling with the increased funding needs for the program," she said, adding that it doesn't matter which party benefits from the donations.

Ward said AmeriHealth has suggested that one of its contributions to the DGA "was comprised of the interest made off the principal of the Medicaid money."

"To be clear, no matter if the political contribution is made up from the principal or the interest from Medicaid funds, it is all government money and shouldn't be used for political purposes," Ward said in a statement.

Under federal regulations, insurers are required to spend at least 85% of Medicaid funds on services for beneficiaries, leaving 15% for plan administration and profits. A spokesperson for the Pennsylvania Department of Human Services said AmeriHealth has complied with those rules.

AmeriHealth isn't the only Medicaid insurer that donates to the DGA, RGA, Democratic Legislative Campaign Committee, and Republican State Leadership Committee — the latter two of which work to elect state legislators across the country.

The University of Pittsburgh Medical Center (UPMC), the No. 2 Medicaid insurer in Pennsylvania, has given three of the four groups a total of $330,000 since 2013, the year AmeriHealth significantly increased its giving. AmeriHealth gave $3.3 million over that period of time.

By contrast, St. Louis-based Centene Corp. has far outspent AmeriHealth, giving a total of nearly $18.8 million to the groups since 2013. Centene is the No. 3 Medicaid insurer in Pennsylvania and the largest in the country, operating in 30 states.

Neither UPMC nor Centene responded to requests for comment. Centene says on its website that its political activity is grounded in the company's public policy positions "and the best interests of our business, our employees, and the members we serve, without regard to political party affiliation."

From West Philly to 13 states

For-profit AmeriHealth is owned by nonprofits Independence Health Group and Blue Cross Blue Shield of Michigan.

Formerly known as AmeriHealth Mercy, the company started as a pilot program in the early 1980s at a West Philadelphia hospital. It now operates in 13 states and Washington, D.C., and employs almost 10,000 people.

AmeriHealth covered about 771,000 Pennsylvania residents enrolled for physical health — including for services such as medical visits, pregnancy and newborn care, and dental — and 176,000 for community services, including nursing homes, at the end of 2025. The company also manages benefits for behavioral health services.

In addition to its Medicaid business, AmeriHealth also offers Medicare Advantage plans for people eligible for both Medicare and Medicaid, as well as Affordable Care Act health insurance marketplace plans.

AmeriHealth had net income of $138 million last year after reporting a loss in 2024, though Independence Health — which includes insurer Independence Blue Cross — has continued to struggle financially.

Pennsylvania's Medicaid program cost $49.3 billion in state and federal funds for the fiscal year that ended in July 2025, according to the Independent Fiscal Office. The state share of Medicaid expenditures, $14.4 billion, accounted for 31% of total general fund spending, among the highest ratios in the country, according to health research nonprofit KFF.

State spending on Medicaid was on track to increase 7.8% for the fiscal year that ended July 1, according to a June analysis by the IFO.

AmeriHealth's $15.7 billion in revenue last year from contracts with the Pennsylvania Department of Human Services and county governments was up from $14.2 billion the prior year and $11.4 billion in 2021 — a 38% increase over the four year-period.

UPMC saw a 50% increase over that period, for $12.6 billion in revenue last year.

AmeriHealth has attributed its financial success last year — when it swung back to a profit a year after reporting losses in 2024 — in part to higher Medicaid rates as well as "work with state partners to support reliable access to high-quality care for the members we serve."

Ali Fogarty, spokesperson for the Pennsylvania Department of Human Services, said rate increases are necessitated by costs that insurers incur administering the Medicaid program.

A big driver has been higher costs for GLP-1s, the drugs that manage Type 2 diabetes and obesity. Pennsylvania in 2023 started covering GLP-1s in Medicaid for weight loss only. Medicaid spending on the drugs in Pennsylvania increased from $223 million in 2022 to more than $1 billion last year, Fogarty said. The state stopped covering GLP-1s for weight loss this year.

"Realities like this can drive rate increases to ensure stability of our Medicaid program and solvency of MCOs that coordinate care, in addition to typical year-over-year increases in costs of care and operations," she said.

AmeriHealth increased its lobbying, too

AmeriHealth spent $1.7 million on federal lobbying last year, up from $970,000 in 2024 and $400,000 in 2023, according to data compiled by OpenSecrets, a group that tracks money in politics.

The bill mentioned the most on the company's lobbying reports in 2025 was H.R. 1, or the One Big Beautiful Bill Act. The sweeping domestic policy legislation — passed by the GOP-controlled Congress and signed into law by Trump — included $900 billion in cuts to federal Medicaid spending over the next decade.

The law reduces spending in part by imposing new work requirements on adults who are eligible for Medicaid under the Affordable Care Act, the 2010 law that sought to expand healthcare coverage. Pennsylvania expanded Medicaid in 2015.

Those requirements take effect Jan. 1. The new law also includes provisions requiring more frequent eligibility checks and cost-sharing requirements for enrollees in the so-called Medicaid expansion group.

The law's Medicaid provisions are projected to increase the number of uninsured in 2034 by 7.5 million people, according to estimates from the Congressional Budget Office. About 300,000 Pennsylvanians could lose coverage due to the Medicaid restrictions, according to Shapiro's administration.

Medicaid insurers opposed the cuts. After the House passed its initial version of H.R. 1 in May 2025, Medicaid Health Plans of America — a trade group that represents AmeriHealth and other insurers — cautioned Senate leaders against legislative provisions "that have been found to increase churn, set up additional barriers to receiving coverage, disincentivize essential care, hamstring states in financing the program, and that will likely cause disruption that radiates across the health care system."

Republicans say the law will strengthen the integrity of programs like Medicaid and help ensure that able-bodied adults on public assistance are contributing to society. Democrats voted against the measure, accusing the GOP of cutting the safety net to finance tax cuts for the wealthy.

The One Big Beautiful Bill Act has big implications for state budgets. Starting in October, states including Pennsylvania will be restricted in their ability to finance Medicaid through taxes on healthcare providers such as hospitals, nursing homes, and insurers. States have traditionally used that financing mechanism to help draw federal matching funds.

Management consulting firm Oliver Wyman wrote that as states adjust their financing strategies, "plans may face more volatile rate-setting processes, delayed approvals, and growing tension between providers seeking to preserve revenue and payers managing constrained margins."

As H.R. 1 is implemented, insurers like AmeriHealth are maintaining a strong presence in Washington. Records show AmeriHealth spent $1.5 million on federal lobbying through June — almost as much as it spent all of last year.

But as insurers seek to influence policymakers, they are facing increasing criticism from conservatives who say they have failed to improve patient outcomes, lower costs, or deter fraud. More broadly, Trump last year directed Health and Human Services Secretary Robert F. Kennedy Jr. to "take appropriate action to eliminate waste, fraud, and abuse in Medicaid."

"Medicaid managed care creates strong incentives to maximize enrollment, as plans are generally paid a fixed amount for each enrollee," Brian Blase, a former Trump White House official and president of the Paragon Health Institute, wrote in June. "Improper enrollment, duplicate enrollment, and phantom enrollment increase payments flowing to MCOs."

The plans say they have taken action against fraud and abuse. The Medicaid Health Plans of America in a February report pointed to an inspector general report showing that insurers in recent years had steadily increased their fraud referrals to state law enforcement agencies.

Pennsylvania's GOP-led Senate in July passed a resolution, largely along party lines, directing the Legislative Budget and Finance Committee (LBFC) to audit the state's Medicaid program. The resolution calls for a review of the "standards used in Pennsylvania to evaluate Medicaid managed care program contracts."

Democrats said they wanted to limit the scope of the audit, saying the state's Medicaid program is already subject to federal reviews.

The resolution does not carry the force of law, but its lead sponsor, Dush, said he hopes the bipartisan LBFC — a committee that consists of 12 legislators from both chambers of the General Assembly — agrees to take up the cause.

Charitable giving

When the federal government shut down last fall amid a congressional spending impasse, the Trump administration paused the disbursement of food assistance, known as SNAP benefits, which help low-income families pay for groceries.

Within days of that announcement, North Carolina Gov. Josh Stein said the state would grant $10 million to local food banks — and that AmeriHealth Caritas and other private donors had also chipped in.

AmeriHealth, which had won a Medicaid contract with the state in 2019, gave $5 million, according to Stein's announcement. "With the help of generous partners, North Carolina is taking action to keep families fed," Stein, a Democrat, said in a news release at the time.

It's an example of how AmeriHealth has made philanthropic gifts in line with causes promoted by political leaders in states where the company does business. Drutman, the lobbying expert, said supporting such causes can be seen as part of a company's broader political strategy.

"As long as government is an important player in an industry, either as a regulator or purchaser of services, companies can have a strong interest in making sure that people in power have a positive opinion of the company," he said. "Usually, the positive opinion of a company is not free."

Stein's office didn't respond to a request for comment.

AmeriHealth told The Inquirer that the company and its foundation invest in community organizations "to improve access to care and address needs such as maternal health and food insecurity."

"We invest in healthcare policy that is aligned with the needs of the nation's most vulnerable populations," the company said.

Another organization it partnered with was the Hope Florida Fund, a charity founded by Casey DeSantis, wife of Republican Gov. Ron DeSantis. The Governor's Office announced in March 2023 that AmeriHealth had contributed $100,000 to reduce reliance on public assistance and make grants to local nonprofits.

The next month, the state started the bidding process for new Medicaid contracts. AmeriHealth ultimately lost its bid to remain in Florida, where it had operated since 2012. Gov. DeSantis' office didn't respond to a request for comment.

Sometimes AmeriHealth's gifts are smaller.

Pennsylvania House Speaker Joanna McClinton, a Democrat who represents parts of West Philadelphia and Delaware County, reported on her 2025 financial disclosure form that AmeriHealth had donated 250 bookbags at resource fairs in her district. She valued the gift at $2,500. A spokesperson for McClinton confirmed the gift but otherwise had no comment.

Other companies including insurers Highmark Wholecare and Independence Blue Cross gave similar gifts, according to the disclosure.

AmeriHealth has won praise for some of its giving.

In May, Val Arkoosh, secretary of the Pennsylvania Department of Human Services, visited the Greater Philadelphia YMCA's Willow Grove branch to highlight a maternal health initiative that provides a free membership and programming for expectant moms.

AmeriHealth's foundation gave $50,000 over two years to the Greater Philadelphia YMCA to help fund the initiative. The Independence Blue Cross Foundation also made a contribution.

Arkoosh's office said in a news release that the initiative "aligns perfectly" with the Shapiro administration's "Healthy Moms, Vibrant Futures" strategic plan.

Fogarty, the DHS spokesperson, noted that the U.S. maternal mortality rate outpaces all other high-income countries and said Arkoosh, an obstetric anesthesiologist, is passionate about the issue. "We appreciate the many partners who work to address maternal mortality and are stepping up to support mothers and children in their community," Fogarty said.

AmeriHealth's foundation said in a news release that "providing children with healthy beginnings will help them avoid adverse experiences later in childhood."

The release featured a photo of Arkoosh standing next to a YMCA executive and Steve Fera, an IBX executive and AmeriHealth Caritas Foundation board member.

© 2026 The Philadelphia Inquirer. Visit www.inquirer.com. Distributed by Tribune Content Agency, LLC.