"The biggest public health insurance programs have become increasingly privatized over the last decade, even while politicians sparred over whether government-run health care should be expanded to cover more Americans.
Why it matters: Although privately run Medicare and Medicaid plans are still highly regulated and funded by the government, the commercialization has complicated efforts to rein in medical spending and unleashed fierce partisan fights like the ongoing one over Medicare Advantage.
Driving the news: The insurers that administer Medicare benefits and their allies are running an enormous lobbying blitz against proposed regulations by the Biden administration that they say will cut their government funding and, in turn, harm enrollees.
Supporters of the cuts say that the proposal corrects overpayment, which plans obtain by manipulating the billing system.
The potency of the lobbying is a sign of just how ingrained Medicare Advantage has become among seniors over the years — and how important it is to some insurers' business mix.
The big picture: Medicare for All rose to prominence during Democrats' 2016 presidential primary, championed by Sen. Bernie Sanders.
Four years later, it returned as a key litmus test for Democratic presidential hopefuls. More moderate candidates, including President Biden, instead embraced a public option, which would extend eligibility for government-run insurance to more Americans.
But as Democrats aired out whether or not to abolish private insurance, existing public programs became increasingly commercialized.
Meanwhile, attempts to expand Medicare eligibility or benefits as part of Democrats' domestic policy agenda during Biden's first two years in office fizzled largely over the cost.
By the numbers: Medicare Advantage enrollment has grown from 22% of eligible Medicare beneficiaries in 2008 to 48% of beneficiaries in 2022, per KFF. This year's enrollment numbers, when they're released, will likely reveal that the majority of seniors are now enrolled in a Medicare Advantage plan.
Private plans are even more ubiquitous in state Medicaid programs.
In 2020, 72% of Medicaid beneficiaries were enrolled in a Medicaid managed care plan, also per KFF. In fiscal year 2021, more than half of state and federal Medicaid spending went to managed care organizations.
Although Medicaid managed care organizations can be private for-profit, private non-profit or government plans, as of 2020 half of the market was covered by plans owned by one of five companies: Centene, Molina, Elevance, UnitedHealth Group and CVS.
Between the lines: Administering entitlement benefits is an increasingly lucerative line of work for insurers.
Another KFF analysis found that in 2021, plans had gross margins of $1,730 per enrollee — more than double those of other markets. The second highest were in Medicaid managed care, which had gross margins of $768 per enrollee — higher than both the group and individual market.
The analysis cautions that gross margins aren't equivalent to profitability but are indicative of trends. A clear one presented in the analysis is that the employer-sponsored and individual markets were significantly less profitable in 2021 than they were in 2018, while managed care plans did better."