CA Insurer for MediCaid Goes Under—State Takes Over—More to Come?

By the end of next year, if Guv Brown is right (he does get very confused about facts and numbers) there will be eleven million people in California getting free MediCaid coverage—not health care, because few doctors and hospitals will accept these patients. The cost to the taxpayers is going to be an extra $1.2 billion in the 2014-15 fiscal year. It is breaking the bank. It is also the cause of an insurance company being taken over by the State government.

Is this the start of the end for private profit and non-profit insurers? Can they afford lengthy waits for service, fewer and fewer providers and long reimbursement periods? Government is squeezing these firms out of business.

“But the financial problems of the Alameda Alliance are a “calamity” and a “debacle” for its mostly low-income enrollees, the state Department of Managed Care said in court papers this month after naming a conservator to oversee the nonprofit public health care provider. The health plan and its prominent East Bay backers are fighting to return it to local control, accusing a state consultant of an “irreconcilable conflict of interest” and asking for more time to sort out a backlog of unpaid medical claims.”

Healthcare costs

State seizes failing Alameda County health insurance provider

By Matt O’Brien and Rebecca Parr, Bay Area News Group, 5/20/14

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“The crisis is not simply a matter of bookkeeping woes,” said a court memo by Carol Ventura, deputy director of the state Department of Managed Care, which regulates health plans. Ventura wrote that the Alameda-based insurer could also be committing “serious violations” of state law by not promptly paying back some 280,000 backlogged claims.

The state earlier this month named J. Mark Abernathy as a temporary conservator. Abernathy works for Emeryville-based Berkeley Research Group, the same consultant that had been monitoring Alameda Alliance’s finances since November.

“A conservatorship is absolutely the last step, but we need to make sure the enrollees continue to receive quality care,” said Marta Green, spokeswoman for the state agency. “Their care will not be interrupted while the conservator brings Alliance into a solid financial condition.”

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

Comments

  1. The company must be on the “S”hit list, Obama promised to subsidize all insurance company’s that are loosing money because of Obama Care, at tax payers expense. And California can expect another state tax for Sacramento taking over this insurance company….. Thank you Democrats for Obama Care.

  2. A state like California, in massive long term debt while simultaneously running a large fiscal year deficit in 2014, simply cannot afford to pick up the slack for the financial failures they have created in the private sector through high taxes and over-regulation. There will be a price to pay. The universal law of “for every action there is an equal and opposite reaction” still applies, despite “progressive” wishes to the contrary.

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