MCOS (TX)- Bonnen’s Deal To Prioritize Profit In Medicaid Coverage

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[MM Curator Summary]: 2 brothers are working to help national MCOs crack open more of the LoneStar state. One of them is the chairman of the House Appropriations Committee. The other is the former Speaker of the House. Not making this up.



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As the budget fight in the Texas Legislature heats up over school vouchers, a quiet addition being pushed by the Bonnen Brothers could start funneling Medicaid dollars into more private, profit-driven companies’ pockets.

According to Quorum Report, former Texas Speaker of the House Dennis Bonnen has been pushing for a budget amendment on behalf of Amerigroup, a for-profit national medical coverage company that provides health insurance to low-income people. In practice, that means that Amerigroup stands to make billions of dollars when they win contracts to administer Medicaid coverage.

His brother, Greg Bonnen, is currently the chairman of the House Appropriations Committee. He is supporting a new rule that would judge potential Medicaid vendors based not on quality of care, but by how profitable they are.

This comes during a time when a significant fight is happening over how Medicaid will be run in the state. Currently, for-profit entities like Amerigroup are trying to circumvent county programs that also offer Medicaid through their hospital systems. These non-profit organizations control 11 percent of the state’s Medicaid managed care networks and re-invest back into their local communities.

Because of this, they legally receive preferential treatment over for-profit organizations who instead put any excess money in investor pockets. Two bills this session have tried to eliminate the preferential treatment, making it easier for for-profit companies to swoop in and take over the contracts.

The budget addition would allow the voting process to be circumvented, and possibly not even be debated on the chamber floor.

In other jurisdictions where Amerigroup has taken over Medicaid, they have reported enormous profits up to 30 percent. They have also had to settle fraud lawsuits over denying care to patients that totaled in the hundreds of millions. In Texas, Amerigroup has been fined for denying care to disabled residents.

By allowing profit margins to determine a Medicaid managed care provider’s worthiness, it prioritizes companies that deny the most coverage as that increases their profitability. Poor Texans, especially in rural areas, will end up with fewer options for care and will be forced to go without.

Currently, insiders who spoke to Quorum Report say that Greg Bonnen is making the budget rider a top priority in the House, and has spoken to his counterpart Joan Huffman (R-Houston) in the Senate abut keeping the rider in the final budget bill. With all the fighting over school vouchers and property tax relief dominating the media coverage, a simple change to Medicaid managed care might very well fly under the radar.

Medicaid currently serves 5.4 million Texans, by far the largest medical insurance used in the state. It is also one of the stingiest programs in the nation, being completely unavailable to most non-disabled Texans regardless of income. Texas continues to refuse the Medicaid expansion offered by the Affordable Care Act, the largest state to still do so. Texas Republicans have allowed a small increase in availability for post-natal Texans that was aimed at curbing the state’s abysmal maternal mortality rate.