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5 States Leaving the Most Obamacare Medicaid Expansion Money on the Table

The Affordable Care Act is clearly a transformative law, as evidenced by the more than 8 million people who signed up for health insurance on state and federal marketplace exchanges last year.

Yet it's also a highly controversial law that has created wild bifurcations of opinion from individuals and states with regard to its ability to lower the number of uninsured and keep medical cost inflation under control. One particularly notable issue of contention among supporters and opponents of the Affordable Care Act is Medicaid expansion.

Source: WellCare Health Plans 2013 annual report.

WellCare's future prospects to add new Medicaid members to its network may also be dim. Medicaid revenues from Florida and Georgia are expected to account for about one-quarter of the company's total annual premium revenue in 2014. With new members being potentially hard to come by in these two critical states, it could be difficult for WellCare to live up to investors' expectations.

The same could be true for Centene and Molina Healthcare .

Centene actually boosted its profit guidance earlier in 2014 after announcing stronger than expected enrollments and a large boost in premium and service revenue. Centene has benefited from dipping its toes into the individual insurance market, as well as broadening its consumer focus to include a greater number of citizens in states in which it operates. In Florida, for example, the company won a sizable portion of the state's revised Medicaid program, which includes blind, disabled, and elderly persons.

Yet many of these same markets may also present challenges. Centene has Medicaid and Children's Health Insurance Program plans available in Florida, Georgia, and Texas. Without Medicaid expansion Centene's future growth in these markets could be challenged.

In similar fashion, Molina has seen success in transitioning into the individual care market for the first time, as well as picking up a number of new government-sponsored members in large markets that expanded their Medicaid program, such as California and Washington state. Combined, these two markets were responsible for 40% of Molina's covered health plans in 2013.

Texas and, to a lesser extent, Florida, also represent areas of important growth opportunity for Molina. As of the end of 2013, Molina counted 252,000 Texans and 89,000 Floridians as members. With the Robert Wood Johnson Foundation finding that a combined 2.6 million people in Texas and Florida are not eligible for Medicaid because the states rejected expansion, Molina could be missing out on quite a few potential new members.

Only time will tell if the new report's calculations prove accurate, but one thing is a near-certainty: These insurers aren't going to sit idly by as nearly half of all U.S. states reject federal funds to expand Medicaid. Using transparency and the new ease of market entry to their advantage, I'd expect an increasing number of Medicaid-based insurers to take a chance in more individual state exchanges, and to look for opportunities to cover broader audiences within their existing networks.

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The article 5 States Leaving the Most Obamacare Medicaid Expansion Money on the Table originally appeared on Fool.com.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong , track every pick he makes under the screen name TrackUltraLong , and check him out on Twitter, where he goes by the handle @TMFUltraLong .The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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