Philadelphia Insurer Eyes A Piece Of Minnesota’s $4B Medicaid Market

A Philadelphia-based health insurer plans to apply for an HMO license in Minnesota so it can compete for business in Minnesota's public programs for lower-income residents.

The plans were disclosed to the Star Tribune on Monday by AmeriHealth Caritas, a for-profit subsidiary of Independence Health Group, which is the parent company of the Blue Cross insurance company in Philadelphia. The insurance company is also backed by Blue Cross and Blue Shield of Michigan.

For decades, Minnesota has hired HMOs to manage care for people in the Medical Assistance and MinnesotaCare programs, but the licenses were limited to nonprofit carriers up until 2017. Earlier this year, Minnetonka-based UnitedHealthcare became the first for-profit insurer to be licensed in the state as an HMO.

"This week we launched an advertising campaign in the Twin Cities area to make local health care providers aware of us," AmeriHealth Caritas said in a statement to the Star Tribune. "We are planning to submit our HMO license application in the near future."

For decades, Minnesota has hired HMOs to serve as managed care organizations in the Prepaid Medical Assistance Program (PMAP) as well as MinnesotaCare. Medical Assistance is the state's Medicaid health insurance program for low-income Minnesotans while MinnesotaCare covers slightly higher-income residents who lack job-based coverage.

Next year, the state Department of Human Services plans to take bids from HMOs interested in managing care for families and children covered by PMAP and MinnesotaCare in the Twin Cities region.

In 2018, the HMOs at Eagan-based Blue Cross and Blue Shield of Minnesota, Bloomington-based HealthPartners and Minneapolis-based UCare were the largest managed care organizations in PMAP and MinnesotaCare. A Star Tribune analysis of state filings shows the HMOs for 2018 collectively reported about $69.2 million in net income on about $4 billion in revenue from the programs.

AmeriHealth Caritas says its advertising campaign will include print, radio and digital media. The insurer's focus in Minnesota currently is limited to the Medical Assistance and MinnesotaCare markets.

"Despite ... [the] affiliation with Independence Blue Cross, AmeriHealth Caritas Family of Companies is not a Blue Cross Blue Shield licensee (BCBS) and therefore is allowed to compete with BCBS licensees in other states," the insurer said in a statement.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck

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