Back to top

Image: Bigstock

UnitedHealth (UNH) Unit Chosen to Aid Missouri Medicaid Members

Read MoreHide Full Article

UnitedHealth Group Incorporated’s (UNH - Free Report) business, UnitedHealthcare, has been recently picked up by Missouri as one of the three managed care organizations for executing its MO HealthNet Managed Care Program. The program is meant to serve the state’s Medicaid beneficiaries in Temporary Assistance for Needy Families and the Children’s Health Insurance Program.

Shares of UnitedHealth Group rallied 1.4% on May 13.

The recent contract win is expected to strengthen the presence of UnitedHealthcare throughout Missouri, where it invested efforts to continue devising a solid Medicaid program over the past five years. For complementing this purpose, the UNH business joined forces with the organization and one of its program divisions that administers the Medicaid program of the state - Missouri Department of Social Services and MO HealthNet Division.

With roughly one million adults and children eligible for the general MO HealthNet Managed Care Program in Missouri, the latest contract equips the UnitedHealthcare Community Plan of Missouri to extend health benefits to a certain part of eligible individuals. These benefits can be availed from Jul 1 of this year and encompass access to an integrated network of behavioral health and physical health providers, essential community providers and the long-term care providers of UnitedHealthcare.

This, in turn, is expected to result in better health outcomes for the Medicaid beneficiaries of Missouri, which remain the output of a value-based, whole-person and integrated care model usually followed by UnitedHealthcare to serve diversified communities.

UnitedHealth Group has been working intensely for several years to expand access to care throughout the United States and eliminate hindrances in the way of members opting for care. Apart from boosting geographical presence, contract wins similar to the latest one are expected to provide impetus to the revenues of the chosen UnitedHealthcare business, which usually contributes a significant portion to UNH’s top line and exhibited 13.6% year-over-year revenue growth in the first quarter of 2022.

Additionally, the recent contract win is also likely to solidify the Medicaid business of UnitedHealthcare. The business has also been subject to several contract wins and renewed agreements in the past as well, which continued to boost the membership growth of the company. An increase in membership should aid the premium growth of the healthcare provider, which remains the most significant contributor to the revenue figure of UnitedHealth Group. The number of people served through the Medicaid business of UnitedHealthcare grew 12% year over year in the first quarter of 2022.

Similar to UnitedHealth Group, healthcare providers, such as Centene Corporation (CNC - Free Report) , Humana Inc. (HUM - Free Report) and Molina Healthcare, Inc. (MOH - Free Report) , benefit due to strong membership growth and have been awarded contracts by various states from time to time.

The pursuit of a value-based care model, cutting-edge technologies, provider collaborations, a well-diversified healthcare suite and solid nationwide presence fetched numerous contract wins and deal renewals for Centene. Some of the states that chose CNC for serving members in 2021 include Arizona, Nevada and Ohio. In May 2022, the Missouri subsidiary of Centene, Home State Health, received the MO HealthNet Managed Care General Plan and Specialty Plan. These deals continue to boost the managed care membership metric of Centene, which improved by 8% year over year as of Mar 31, 2022.

Humana boasts a strong Medicaid business in place built on numerous contract wins and renewals, which, in turn, have given impetus to the membership growth of the healthcare provider. In February 2022, the Louisiana Department of Health awarded HUM a contract for offering health care coverage to Medicaid beneficiaries across the state. Premiums from Humana’s Medicaid and other businesses grew 31.8% year over year in the first quarter of 2022.

The growing membership, higher premium revenues and contract wins similar to those in Nevada and Ohio continue to benefit Molina Healthcare. The Medicaid membership of MOH climbed 18.3% year over year as of Mar 31, 2022. Consequently, revenues from the Medicaid segment of Molina Healthcare also witnessed a 23.2% year-over-year increase during the same time frame.

Price Performances

Shares of UnitedHealth Group have gained 18.8% in a year compared with the industry’s growth of 16.2%. UNH currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment Research
Image Source: Zacks Investment Research

Shares of Centene and Molina Healthcare have rallied 18.4% and 13.1%, respectively, in a year. Meanwhile, Humana stock has declined 2% in the same time frame.