ABC-TV News – GOOD MORNING AMERICA
CHRIS CUOMO (ABC NEWS): (Off-camera) Now, we go to our series ‘GMA Gets Answers” where we take a hard look at the health care insurance industry in this country. This morning, a look at what 32 states call an answer to providing health care to our most vulnerable, private Medicaid HMOs. But as you’re about to see, people who need care desperately say it’s being denied while those who are supposed to be caring for the poor are getting rich.
MIKERIYA AINSLEY (PATIENT): Well, they say that I don’t fit in.
CHRIS CUOMO (ABC NEWS): (Voiceover) 8-year-old Mikeriya Ainsley says she gets teased at school because of the way she looks and talks. Born with a brain disorder and developmental delays, she struggles with basic tasks like snapping toys together. Now, the one thing that helped her cope with her problems is gone.
ELLEN ROBERTS (MIKERIYA AINSLEY’S THERAPIST): It’s hard enough for them, you know, to make it in this world and then a service that’s supposed to be available to them, to be taken away from them just because somebody wants to make money.
CHRIS CUOMO (ABC NEWS): (Voiceover) All of her life, Georgia’s Medicaid system paid for Mikeriya’s weekly physical, occupational and speech therapy at clinics like this one, where other kids, most of them poor, come for much-needed care.
ELLEN ROBERTS (MIKERIYA AINSLEY’S THERAPIST): It is heartbreaking because we have seen children under the old Medicaid program make tremendous progress, and we’re not gonna see it with these kids.
CHRIS CUOMO (ABC NEWS): (Voiceover) Since 2000, 32 states have turned their Medicaid systems over to private HMOs hoping the companies would cut through red tape, provide better
services and save states money. But critics like these protesters in Georgia say it’s the HMOs who are making money by denying care to people who need it most.
JERRY FLANAGAN (FOUNDATION FOR TAXPAYER AND CONSUMER RIGHTS): The effect on patients has been having a harder time getting access to the care they need, waiting longer for doctors visits, and in some cases, services being cut altogether.
CHRIS CUOMO (ABC NEWS): (Voiceover) Susan Pisano speaks for the insurance industry.
SUSAN PISANO (AMERICA’S HEALTH INSURANCE PLANS): Whether you look at infant mortality, low birth-weight babies, immunizations, all of those things have been improved when Medicaid has moved to managed care systems.
CHRIS CUOMO (ABC NEWS): (Off-camera) But you know you have a lot of people complaining that care is denied, claims are denied, and that these companies make money by simply paying out less so they have more money left over and that becomes their revenue or
their profit.
SUSAN PISANO (AMERICA’S HEALTH INSURANCE PLANS): Well, first of all, this over time is a fairly low-profit business.
CHRIS CUOMO (ABC NEWS): (Off-camera) At least it should be, say the critics. The companies are supposed to simply take tax revenues and use them to pay claims to the most
vulnerable members of society. But in the last five years, the four biggest Medicaid-only HMOs, WellCare, Centene, Molina and Amerigroup, made over $1 billion in profits, sparking a surge in their stock prices. WellCare’s CEO, Todd Farha has racked up more than $100 million of his own in stock and options since his company went public in 2004. Centene’s CEO, Michael Neidorff, has been granted more than $30 million in company stock.
CHRIS CUOMO (ABC NEWS): (Voiceover) Centene even pays for him to use a posh jet like this one for what the company calls an efficient use of his time and for personal security.
But that doesn’t explain why he uses it for personal travel or the on-board espresso machine and entertainment center. And that’s not all. The company also paid hundreds of thousands of dollars for the naming rights to this Minor League baseball stadium. It helps bankroll the National Symphony Orchestra, and even commissioned this $7,000 sculpture in a Montana airport.
CHRIS CUOMO (ABC NEWS): (Off-camera) In a business like Medicaid, where you’re dealing with the vulnerable and tax dollars, should you really have companies with enough money for corporate jets and their name on Minor League baseball stadiums? Should there be that much money available to them?
SUSAN PISANO (AMERICA’S HEALTH INSURANCE PLANS): That is a legitimate public policy discussion. States have been struggling to preserve their safety nets. And not only do many studies demonstrate that Medicaid populations are better off under the new systems, but they als
demonstrate that states are saving money.
CHRIS CUOMO (ABC NEWS): (Voiceover) But saving money how? In Illinois, the state sued Amerigroup and won, arguing that the company took $232 million in tax dollars over four years
but spent little more than half on healthcare. How? By signing up healthy patients and avoiding enrolling sick ones. This court deposition shows how Amerigroup’s marketing officer described his strategy.
HERMAN WRIGHT (FORMER CHIEF MARKETING OFFICER): The growth strategy was to bring in all of the, all of the folks out there who are healthy, which were basically the majority of your population.
COURT OFFICIAL (MALE): And not to focus on the people who were already sick and in the, the medical system?
HERMAN WRIGHT (FORMER CHIEF MARKETING OFFICER): Well, I’m from the health insurance industry from day one. I think one of the things, if I told anybody that I was gonna go out and enroll as many sick people as I could in health insurance, I would be fired.
CHRIS CUOMO (ABC NEWS): (Voiceover) We asked Amerigroup and the other major Medicaid HMOs to talk with us about the care they provide and the profits they earn. All declined and referred us to the industry’s trade group.
CHRIS CUOMO (ABC NEWS): (Off-camera) Should we cap the profits? So forget about good years, bad years, you know you can’t make more than this because we want to protect this
group?
SUSAN PISANO (AMERICA’S HEALTH INSURANCE PLANS): Well, in, in some states, the, the profit levels are, there is a cap on them.
CHRIS CUOMO (ABC NEWS): (Off-camera) And what do you think of that?
SUSAN PISANO (AMERICA’S HEALTH INSURANCE PLANS): You know, I think that it is reasonable for states to look at what makes sense to create a system that works for them.
CHRIS CUOMO (ABC NEWS): (Off-camera) What does that mean? Should you cap profits or no?
SUSAN PISANO (AMERICA’S HEALTH INSURANCE PLANS): I’m not gonna say yes or no to that question.
CHRIS CUOMO (ABC NEWS): Why not? You are here to represent the companies. What is their position, because that would address the concern.
SUSAN PISANO (AMERICA’S HEALTH INSURANCE PLANS): I don’t know that they…
CHRIS CUOMO (ABC NEWS): (Off-camera) People say, ‘We don’t want them to price gouge. We don’t want them to discourage care. So let’s take a little bit of the profit incentive out.”
SUSAN PISANO (AMERICA’S HEALTH INSURANCE PLANS): I think it’s the wrong question to ask.
CHRIS CUOMO (ABC NEWS): (Off-camera) Why?
SUSAN PISANO (AMERICA’S HEALTH INSURANCE PLANS): The question to ask ought to be, are people getting better access to care?
CHRIS CUOMO (ABC NEWS): (Voiceover) Critics say too often the answer is ‘No.” Patients are getting fewer services. And that unless the government sets caps on profit and revenue, private companies will continue to make money off Medicaid while denying care for patients like Mikeriya.
ELLEN ROBERTS (MIKERIYA AINSLEY’S THERAPIST): At this point, if she doesn’t get the extra help, she’s gonna become very frustrated and she will probably just kind of give up.
CHRIS CUOMO (ABC NEWS): (Off-camera) Now, while the Medicaid HMOs wouldn’t speak to us on camera, two of them did send us written statements. Amerigroup says it is appealing the
verdict of that lawsuit in Illinois.
GRAPHICS: STATEMENT FROM TED DISON, COUNSEL FOR AMERIGROUP CORPORATION
CHRIS CUOMO (ABC NEWS): (Voiceover) In a statement, the company told ‘GMA,” ‘A few snippets of trial testimony from the case don’t tell the full story. Amerigroup’s state partner
knew about Amerigroup’s marketing initiatives and approved them.” And as for Centene Corporation’s contributions to things like that baseball stadium and the statue in Montana and the National Symphony Orchestra, the company says it remains committed to these activities and
fervently believes they reflect the actions of a responsible and publicly-focused corporation. We wanna do more of these stories. We wanna know what works. We wanna what did not work. So please send us your stories about healthcare to ABCNEWS.com.
