Amerigroup Faces Near-Term and Post-Reform Risks Due To State Budget Problems and Industry Excise Tax

NASHVILLE, Tenn., Nov. 15, 2010 /PRNewswire/ -- HealthLeaders-InterStudy, a leading provider of managed care market intelligence, reports that Amerigroup, the nation's largest stand-alone Medicaid insurer, faces near-term and post-health reform risk due to ongoing state budget problems and an industry excise tax. According to the new National MCO Analyzer: Amerigroup, epidemic state budget problems are jeopardizing retention of state Medicaid contracts and planned Medicaid expansions, which was seen when the plan exited a Medicaid reform project in Florida.

In addition, the report also finds that the industry excise tax that will be put in place in 2014 will affect health plans more reliant on fully insured lives, such as those in the Medicaid sector. In addition, more private employers will switch to self-funding plans to avoid the tax, leaving Amerigroup in a shrinking pool of full-risk plans that takes the hit.

"Retention of state Medicaid contracts is never a sure bet and competition is intensifying," said HealthLeaders-InterStudy Product Director Jane DuBose. "Georgia, Amerigroup's second-largest market that accounts for ten percent of its business, will re-bid its contract in 2011. In addition, while it experienced a healthy boost in 2010 from rate increases, Amerigroup will continue to struggle to control medical costs associated with its patient population."

About National MCO Analyzer

National MCO Analyzer is the account manager's tool for in-depth analysis of national MCO corporate strategies, opportunities and challenges. Profiling the country's largest managed care organizations, each report includes:

• Market analysis from HealthLeaders-InterStudy's managed care market experts, along with an overview of opportunities and challenges for a plan in the year ahead.
• Competitive analysis outlining a managed care organization's strengths, challenges and opportunities.
• Plan dashboard providing national-level enrollment mix and trends.

About HealthLeaders-InterStudy

HealthLeaders-InterStudy, a Decision Resources, Inc. company, is the authoritative source for managed care data, analysis and news. For more information, please visit www.HL-ISY.com.

About Decision Resources, Inc.

Decision Resources, Inc. is a cohesive portfolio of companies that offers best-in-class, high-value information and insights on important sectors of the healthcare industry. Clients rely on this analysis and data to make informed decisions. Please visit Decision Resources, Inc. at www.DecisionResourcesInc.com.

All company, brand or product names contained in this document may be trademarks or registered trademarks of their respective holders.

SOURCE HealthLeaders-InterStudy

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