Health insurers Anthem, Cigna Corp. and Molina Healthcare stand to lose millions in premium revenue after losing ground in the Texas Medicaid Star+Plus program, a managed care program worth nearly $10 billion in premium revenue for managed care organizations.
The Texas Health and Human Services Commission on Tuesday evening announced three-year contract awards for the program, which serves about 525,000 seniors and people who are blind and disabled. Contracts start on Sept. 1, 2020. It’s likely that some insurers will challenge the contract awards.
Long Beach, Calif.-based Molina, which lost five regions but would still operate in two, suffered the biggest blow. Several equity analysts estimated the loss would reduce the insurer’s future revenue between $700 million and $930 million.
It’s the insurer’s third recent Medicaid contract loss—it suffered losses in New Mexico and Florida in late 2018 and early 2019—but the first bid that the new CEO had a hand in.