Humana and Aetna earned the biggest profits among Florida health maintenance organizations in 2007, but CarePlus, which does only Medicare, raked in by far the biggest profits per member, thanks to lucrative payments from the federal government, according to a study being released Friday.
The Obama administration has said that it believes Medicare HMOs are generally getting more money than they deserve. Democratic leaders propose to cut their benefits and use the savings to fund reforms.
"Companies like CarePlus are getting their profitability to a large extent from the federal government," said Allan Baumgarten, author of the study, Florida Health Market Review.
He noted that in earlier years, the Medicare HMOs, now called Medicare Advantage Plans, were funded at about 95 percent of what a patient would be expected to cost under fee-for-service.
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Under the George W. Bush administration, that rate was increased to 115 percent of fee-for-service, in an attempt to privatize Medicare by pushing members toward commercial insurers.
CarePlus, a subsidiary of Humana, had a profit of $56.2 million with an enrollment of 55,541, according to Baumgarten's report. That worked out to a profit of $1,012 per member.
Meanwhile, the parent Humana, with a broad base of private and Medicare patients, earned $136.7 million on 466,905 members in Florida – $293 per member. Aetna's Florida operation brought in $100.2 million in profit from 530,423 members – $189 per member. Health Options, the Blue Cross Blue Shield HMO, earned $49.5 million on 175,096 members – $282.
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