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HR-1 and the $1 Trillion Medicaid related cuts, 5 large companies affected today, JULY 2

catch22catch22
edited 3:27PM in Other Investing
I will presume that companies in the Medicaid marketplace have been 'running the numbers' regarding impacts from HR-1 and funding cuts included in the legislation.
My search is somewhat related to Michigan, but would apply to other states.

NOTE: HR 1, also known as the "One Big Beautiful Bill Act," has significant provisions related to Medicaid dollar cuts. The Senate recently passed an amended version of HR 1 that, according to the Congressional Budget Office (CBO), would cut gross federal Medicaid and Children's Health Insurance Program (CHIP) spending by $1.02 trillion over the next ten years. This represents cuts that are even larger than those proposed in the House-passed version of the bill.
--- July 2, closing; Medicaid affected companies

EDIT: RGC in the list is an outlier to the domestic list. It is a Chinese herbal company being gamed by the day traders.
Apologies. I should have checked the unfamiliar name.

CNC Centene Corp, -40.4%

RGC Regencell Bioscience Holdings Ltd, -29.04%

MOH Molina Healthcare Inc, -21.96%

OSCR Oscar Health Inc, -18.69%

ELV Elevance Health Inc, -11.50%

--- Several major insurance companies offer Medicaid plans, with five large, publicly traded companies dominating the market. These include Centene, Elevance (formerly Anthem), UnitedHealth Group, Molina, and CVS Health. In Michigan, Priority Health is a prominent provider of Medicaid plans, including MIChild, Healthy Michigan Plan, and Children's Special Health Care Services.

Here's a more detailed look:

Dominant Players:
Centene, Elevance, UnitedHealth, Molina, and CVS Health manage a significant portion of Medicaid enrollees nationally. These companies operate Medicaid managed care organizations (MCOs) in many states.
Michigan Medicaid:
Priority Health is a major player in Michigan, offering Medicaid, MIChild, Healthy Michigan Plan, and Children's Special Health Care Services.
Other Michigan Plans:
Other options in Michigan include Aetna Better Health, UPMC for You, and UnitedHealthcare Community Plan.
NCQA Ratings:
The National Committee for Quality Assurance (NCQA) provides ratings for Medicaid health plans. Some Michigan plans with high ratings include Upper Peninsula Health Plan, Meridian Health Plan of Michigan, Priority Health, and Blue Cross Complete of Michigan.
Managed Care:
Many states use managed care to deliver Medicaid benefits, with comprehensive risk-based managed care being a common approach, according to Medicaid and CHIP Payment and Access Commission (MACPAC).

Comments

  • MarkMark
    Will this include the elimination and/or similar cuts in the health care provided to 47, all his cabinet and appointees, and all the representatives and senators who voted to approve this massive pile of manure?
  • Old_JoeOld_Joe
    U'mmmm... no, I don't think so. But maybe the House can fix that... try sending Johnson an email with the suggestion.
  • MarkMark
    If he hasn't 't read the bill he probably won't read my email either but what the hay.
  • msf
    edited 2:22AM
    I haven't taken a close (or to be honest more than a cursory) look at the Medicaid cuts. But from an investment perspective, one should probably look at the for-profit hospital systems as well as insurance companies (i.e. the companies I recognized in OP list). They get a significant amount of supplemental payments from Medicaid (and Medicare) to cover costs. Disproportionate Share Hospital (DSH) comes to mind, but there are other programs as well.

    See, e.g.
    https://www.macpac.gov/wp-content/uploads/2020/03/Medicaid-Base-and-Supplemental-Payments-to-Hospitals.pdf
  • beebee
    Any changes to ACA plans?
  • catch22catch22
    Hi @bee The below are results for an ACA impact search relative to HR-1. I will presume that the information is accurate. Hopefully, there is some information of value for you.
    NOTE: implementation dates are not part of this information.
    Regards,
    Catch

    Key Impacts on the ACA and its Marketplaces:

    Millions losing coverage: Changes to the ACA marketplaces within H.R. 1 are estimated by the Congressional Budget Office (CBO) to lead to at least 3 million people losing their marketplace coverage.

    Challenges to enrollment and potential premium increases: The bill makes it harder for individuals to enroll in and keep their ACA marketplace plans, potentially resulting in higher premiums by reducing available tax credits.

    Expiration of enhanced premium tax credits: H.R. 1 does not extend the enhanced premium tax credits, which were established in 2021 and have helped millions afford marketplace coverage. Their expiration is projected to lead to an additional 4.2 million people becoming uninsured and would be equivalent to a tax increase averaging $700 for millions.

    Destabilization of the marketplaces: The combination of these policies is expected to destabilize the marketplaces, reducing access to coverage and increasing the number of uninsured individuals and the amount of uncompensated care provided by hospitals.

    Elimination of automatic reenrollment: The bill requires annual re-verification of eligibility for individuals receiving premium tax credits, eliminating the automatic reenrollment that nearly 11 million people used in 2025. This adds an administrative burden and could lead to higher premiums for those who don't reenroll promptly.

    No provisional eligibility: Applicants will have to pay full, unsubsidized premiums while awaiting eligibility determinations, which can take weeks or months.

    Removal of repayment cap: The bill removes the cap on how much individuals must repay if they receive excess premium tax credits due to income changes, potentially adding financial risk to those with unpredictable incomes.

    Shortened open enrollment period: The annual open enrollment period would be shortened to November 1st - December 15th, while in 2025, roughly 40% of enrollees signed up after December 15th.

    End to special enrollment periods: The monthly low-income special enrollment period and state-based marketplace special enrollment periods based on income would be eliminated.

    Increased administrative burden for income verification: Individuals with incomes between 100-400% of the Federal Poverty Level would face new income verification processes when applying for premium tax credits.

    Potential Impact on Medicaid:
    Increase in uninsured population: Changes to Medicaid proposed in the bill are estimated to cause 7.8 million individuals to become uninsured by 2034.

    Community engagement requirements: The bill would impose community engagement requirements for certain Medicaid recipients, which could lead to coverage losses.

    More frequent redeterminations: States would be required to redetermine eligibility for the Medicaid expansion population every 6 months, instead of the current 12 months.

    Delay of eligibility rule: A Biden administration rule aimed at simplifying redeterminations and removing barriers to Medicaid and Children's Health Insurance Program (CHIP) enrollment would be delayed.

    Note: These are potential impacts based on analysis of H.R. 1 as of July 3, 2025. The final impacts may vary depending on the ultimate outcome of the legislative process
  • rforno
    edited 9:29AM
    BTW despite campaigning and repeatedly telling the GQP to "not touch Medicaid" Donnie apparently didn't know this bill indeed adversely touches Medicaid when he was meeting with House GQP holdouts yesterday. One of them had to tell him, "yes, yes we are."

    But he's going to sign it anyway, because Toddler Needs A Bigly Win ... and besides, none of it impacts him, his family, or their 'elite' group of associates.
  • larryB
    Beyond the human suffering caused by our fellow human beings losing their health care, the economic cost of this madness is going to be greater than maga understands. We have a medical professional in our family who works for a major healthcare system in a blue state and not at all rural. The Medicaid population is a significant part of their patient population. This will eventually lead to job losses throughout the health care sector.
  • AndyJ
    edited 7:17PM
    That Centene 40% loss yesterday hit AQR's QMNNX and QLENX (which I own and I think some others here do too). Acc'ding to Cramer on CNBC, Centene had to pull its 2025 guidance, as its 'managed care' business in the ACA marketplace is getting smacked by (apparently) healthier people pulling out, leaving sicker folks overrepresented versus its model for profit. Said Cramer, the Medicaid effect may have not been entirely felt just yet. (I have no idea how he knows what the relative impact on their ACA vs. Medicaid exposure really is.)

    Catch's catch is for sure a wakeup call for the broad impact of the lunatics' healthcare massacre. (As he wrote, it hits the ACA too.)
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