{"id":1130314,"date":"2023-07-12T14:02:37","date_gmt":"2023-07-12T14:02:37","guid":{"rendered":"https:\/\/jacobin.com\/2023\/07\/medicaid-enrollment-maximus-contractor-profits\/"},"modified":"2023-07-13T00:02:35","modified_gmt":"2023-07-13T00:02:35","slug":"this-little-known-corporation-is-making-a-fortune-kicking-people-off-medicaid","status":"publish","type":"post","link":"https:\/\/radiofree.asia\/2023\/07\/12\/this-little-known-corporation-is-making-a-fortune-kicking-people-off-medicaid\/","title":{"rendered":"This Little-Known Corporation Is Making a Fortune Kicking People Off Medicaid"},"content":{"rendered":"\n \n\n\n\n

As more than 17 million people stand to lose health insurance in the unfolding Medicaid eligibility review disaster, a little-known company called Maximus is set to make massive profits off of helping the government deny people health insurance.<\/h3>\n\n\n
\n \n
\n Dr Candice Jones attends to her patients Nihmaya Farrell, six, center, and Nichaya Simmons, thirteen, left, and mother Natasha James at the Edgewater Pediatrics in Orlando, Florida, on January 14, 2021. (Willie J. Allen Jr \/ Orlando Sentinel \/ Tribune News Service via Getty Images)\n <\/figcaption> \n<\/figure>\n\n\n\n\n \n

As more than seventeen million people stand to lose health insurance in the unfolding Medicaid eligibility review disaster<\/a>, there\u2019s one company licking its lips: Maximus, a little-known federal contractor that is one of the biggest players in privatizing essential government services previously done by civil servants \u2014 in particular, taking over states\u2019 capacity to determine who is eligible for Medicaid and who isn\u2019t.<\/p>\n

In a February earnings call for shareholders and Wall Street analysts, Maximus\u2019s CEO Bruce Caswell announced that the current nationwide eligibility review of ninety million people on Medicaid and other government health insurance programs \u201cis unprecedented in its scope,\u201d and will allow Maximus \u201cto gain traction in the market.\u201d As a result of the deluge in Medicaid \u201credeterminations,\u201d Caswell said, \u201cwe expect improvement to operating margin.\u201d<\/p>\n

The company has accordingly\u00a0boosted<\/a>\u00a0its earnings estimate by $100 million. Maximus\u2019s share price is closing on its all-time high, up\u00a0nearly<\/a>\u00a050 percent since October. Caswell\u00a0earned<\/a>\u00a0$6.3 million in 2022.<\/p>\n

Outsourcing Medicaid eligibility reviews to Maximus has major implications beyond the company\u2019s expanding bottom line. It also removes essential government services from the realm of public accountability, while draining resources from governments.<\/p>\n

\u201cOne of the big concerns here is it\u2019s a company that\u2019s really making money coming and going from the county, state, and federal governments,\u201d said Daniel Hatcher, a law professor at the University of Baltimore who has studied Maximus. \u201cPeople who are benefiting the most are the company, occasionally governments, but not the people who are supposed to be benefiting from Medicaid services.\u201d<\/p>\n

Along with draining public finances, Maximus and other Medicaid redetermination contractors are incentivized to advocate for making Medicaid even more of a bureaucratic nightmare for recipients.<\/p>\n

\u201cIf you look at the payment structure of these contracts, the more red tape, the more money Maximus makes,\u201d Hatcher said. \u201cThe harder it is to get enrolled, the easier to get kicked off \u2014 the more money Maximus and contractors are making.\u201d<\/p>\n\n \n\n \n \n \n

Maximizing Profits<\/h2>\n \n

During the COVID-19 pandemic, lawmakers required states to stop removing people from Medicaid, the national health insurance program for low-income Americans. The move led to record enrollment in a strictly means-tested program designed to benefit only the very poor \u2014 one from which people are often arbitrarily removed.<\/p>\n

Late last year, Congress passed and President Joe Biden signed a year-end spending bill directing states to resume annual redeterminations of Medicaid recipients\u2019 eligibility for the program. Now, an\u00a0estimated seventeen million people<\/a>, and potentially up to twenty-four million, could lose their coverage.<\/p>\n

Studies suggest that expanding Medicaid coverage substantially\u00a0reduces<\/a>\u00a0deaths, and\u00a0positively<\/a>\u00a0impacts people in poverty throughout their entire lives.<\/p>\n

While there are\u00a0significant reporting gaps<\/a>\u00a0as to where Maximus is doing redeterminations and how states are reporting eligibility reviews, Maximus dominates 60 percent of the Medicaid eligibility market, according to a recent\u00a0report<\/a>\u00a0in\u00a0Modern Healthcare.<\/em><\/p>\n

While the final determinations for Medicaid eligibility must be completed by public employees, every other step of the process \u2014 from processing applications, to running call centers, to reaching out to people on the verge of losing benefits \u2014 can be done by private contractors.<\/p>\n

In a recent investor\u00a0presentation<\/a>, Maximus wrote that it was boosting its \u201crevenue and earnings guidance to account for Medicaid redeterminations,\u201d and noted that \u201cactual volume flow and beneficiary interaction will influence overall profitability.\u201d<\/p>\n

So far,\u00a0more than 70 percent<\/a>\u00a0of those who have recently lost Medicaid coverage have been terminated for administrative reasons, such as not responding to a piece of mail or getting dropped from a call with a redetermination specialist, rather than because they were deemed ineligible due to their income and assets. Many of these people are likely still technically eligible for the program.<\/p>\n

Maximus runs the call center for Medicaid eligibility in Indiana, where 85 percent of the 107,000 people kicked off Medicaid this year lost coverage because of procedural reasons. According to Maximus\u2019s $400-million Indiana contract<\/a>, up to seven percent of its eligibility calls in the state in a given week can be dropped before the company is penalized.<\/p>\n

\u201cWe do not make Medicaid eligibility determinations,\u201d Maximus said in a statement to the Lever<\/em>:<\/p>\n

Our job is to support the states’ responsibilities to ensure that everyone who is eligible for Medicaid remains covered. If they are no longer eligible for Medicaid, we work with the states to refer them to other health care options such as the insurance marketplace. We are not paid in any state on the basis of whether an individual is found eligible or ineligible.<\/p><\/blockquote>\n

Maximus did not answer follow-up questions about the scope of its work in various states and how much revenue the company expects to generate from its Medicaid redetermination business.<\/p>\n

As Maximus seeks to expand its Medicaid redetermination work, the company has leaned into lobbying and political donations.<\/p>\n

Maximus has donated $2.5 million to national political groups affiliated with state and local politicians since 2017. That includes $955,000 to the Republican Governors Association; $665,000 to the Democratic Governors Association; $450,000 to the Republican State Leadership Committee, which funnels money to GOP state legislative campaigns; $210,000 to the Republican Attorneys General Association; and $165,000 to the Democratic Attorneys General Association.<\/p>\n

The company additionally\u00a0donates<\/a>\u00a0to the National Governors Association, a nonpartisan group that represents governors from both parties.<\/p>\n

Maximus spent $960,000 on federal lobbying alone in 2022, and its roster of lobbyists included former longtime representative Al Wynn (D-MD), who is now a senior director at the lobbying powerhouse Greenberg Traurig.<\/p>\n

Wynn was one of just a handful of members of the Congressional Black Caucus to vote \u201cyes\u201d on the\u00a0final vote<\/a>\u00a0on the 1996 welfare reform bill. The legislation, which led to a\u00a0doubling<\/a>\u00a0of extreme poverty, provided an\u00a0enormous boon<\/a>\u00a0to Maximus by incentivizing the outsourcing of welfare eligibility work.<\/p>\n

Shar Habibi, the research director of In the Public Interest, which advocates against privatization, said that Maximus\u2019s role in Medicaid redeterminations will hollow out the government\u2019s ability to effectively provide public services.<\/p>\n

\u201cWhen governments contract with firms like Maximus to do essential public functions like determining who is or isn\u2019t eligible for Medicaid, the question gets raised: Does outsourcing eligibility determination-related functions compromise the integrity of the program, especially when people\u2019s lives are at stake?\u201d she asked. \u201cUsing contractor staff does not promote an effective, efficient, and equitable delivery of Medicaid.\u201d<\/p>\n

Maximus also has major contracts with the federal government to provide assistance to those seeking to enroll in Medicare, the government health insurance program for seniors and those with disabilities, as well as those looking to sign up for individual health insurance plans offered on state marketplace exchanges created under Democrats\u2019 2010 health care law, the Affordable Care Act.<\/p>\n

Some people formerly on Medicaid\u00a0will move<\/a>\u00a0to exchange-based plans, which will almost certainly result in substantially higher\u00a0out-of-pocket costs<\/a>.<\/p>\n

In May, Maximus\u00a0laid off<\/a> seven hundred workers from its Medicare and marketplace call centers where workers were seeking to unionize with the Communications Workers of America (CWA) union. The move led CWA to file an unfair labor practice charge with the National Labor Relations Board and launch<\/a> a petition to pressure secretary of Health and Human Services Xavier Becerra to investigate Maximus\u2019s labor practices.<\/p>\n

Meanwhile, Maximus\u2019s government contracts to do such work have continued to expand under the Biden administration, despite the fact that Joe Biden pledged<\/a>\u00a0in his 2020 campaign that \u201cI intend to be the most pro-union president leading the most pro-union administration in American history.\u201d In September 2022, Maximus was awarded a\u00a0$6.6-billion<\/a> contract from the Centers for Medicare and Medicaid Services (CMS).<\/p>\n

Samira Burns, a spokesperson for the Health and Human Services Department (HHS) which includes CMS, told me that the department has initiated a request for information process with contractors like Maximus \u201cto seek recommendations and remain in alignment with industry best practices to ensure we continue to meet national program missions and strategies. \u2026 In recent years, there has been increasing labor concerns at certain call center locations. HHS\/CMS is looking to explore ways to prevent or mitigate ongoing and future concerns.\u201d<\/p>\n\n \n \n \n\n \n \n

Editor\u2019s note: The author is a member of the NewsGuild-CWA and was a researcher for CWA from 2016 through 2018.<\/p>\n

Additionally, this story has been updated to clarify the phrasing of HHS\u2019s comments provided to the author.<\/p>\n\n\n\n

This post was originally published on Jacobin<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"

As more than seventeen million people stand to lose health insurance in the unfolding Medicaid eligibility review disaster, there\u2019s one company licking its lips: Maximus, a little-known federal contractor that is one of the biggest players in privatizing essential government services previously done by civil servants \u2014 in particular, taking over states\u2019 capacity to determine [\u2026]<\/p>\n","protected":false},"author":138,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"_links":{"self":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1130314"}],"collection":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/users\/138"}],"replies":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/comments?post=1130314"}],"version-history":[{"count":3,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1130314\/revisions"}],"predecessor-version":[{"id":1130961,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/1130314\/revisions\/1130961"}],"wp:attachment":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/media?parent=1130314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/categories?post=1130314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/tags?post=1130314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}