Federal judge blocking Medicaid work rule positive for MCOs: Goldman Sachs

Goldman Sachs analyst Stephen Tanal noted that Politico reported that a federal judge ruled for the second time to block new work requirements as a condition for Medicaid eligibility in Kentucky and Arkansas, calling the ruling an incremental positive for Managed Care and Provider companies. MCOs whose primary business is Medicaid managed care are most exposed to this theme, said Tanal, who lists Molina (MOH), WellCare (WCG) and Centene (CNC) as three with a higher percentage of MMC lives in states that have submitted waivers requesting approval to impose work requirements. However, the analyst also noted that Kentucky’s Governor has already issued an executive order indicating the state would appeal any decision by a court against work requirements and, if unsuccessful, would reverse its Medicaid Expansion program. WellCare, CVS’ (CVS) Aetan, Humana (HUM) and Anthem (ANTM) all operate in Kentucky’s Medicaid managed care program, the analyst noted.

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