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Government programs play bigger role for health insurers

As Medicaid and Medicare celebrate their 50th anniversary, the government health-care programs are now one of the biggest drivers of growth for private-sector health-care companies.

Nearly one out of every three Americans is now covered by Medicare or Medicaid, and the private insurers are playing a bigger role in administering those plans.

Insurers this year will see nearly $586 billion from Medicare and $449 billion from Medicaid, versus $400 billion from private insurance, according to estimates from Leerink analyst Ana Gupte.

"People with government health care, that number is growing while the number of people with private insurance with their employer is starting to shrink a little bit," said Ceci Connolly, head of the PwC Health Research Institute. "So, it's a matter of … where the numbers are shifting."

That shift is partly what is driving consolidation within the industry, Gupte said.

"They're trying to capture the growth in Medicare and Medicaid better. And not all of them have equally good exposure to it," Gupte added.

For Anthem, the expansion of the Medicaid program under Obamacare has been a boon for membership growth. The nation's second-largest insurer reported...


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