Will Medicaid patients lose in WellPoint purchase of Amerigroup? WellPoint's nearly $5-billion acquisition of Medicaid provider Amerigroup is a bet by one of the country's largest private insurers that there are big bucks to be made from publicly funded coverage. It's also an indication that private insurers expect cash-strapped states increasingly to give them the job of managing medical plans for low-income people. That could further complicate efforts to overhaul the costly Medicaid entitlement program as the needs of society are increasingly weighed against the interests of profit-seeking shareholders. "The status quo for Medicaid isn't good," said Lee Goldberg, vice president of health policy for the National Academy of Social Insurance, a nonprofit organization that focuses on government-provided coverage. But I don't know if what WellPoint is doing makes things better. A key factor: Will the insurance industry's growing clout enable it to drive harder bargains with doctors over reimbursement rates? This could exacerbate a continuing trend of physicians refusing to take on new Medicaid patients because they feel shortchanged by the fees offered. If so, the healthcare reform law could result in millions more people being enrolled in Medicaid but fewer doctors willing to treat them. "That's certainly a concern," said Edwin Park, vice president of health policy for the Center on Budget and Policy Priorities, a nonpartisan Washington think tank. The profit incentive could cause WellPoint to push for even lower rates. The company, which operates Anthem Blue Cross in California, is particularly interested in so-called dual-eligibles. These are the more than 9 million people who qualify for both Medicare and Medicaid because of age, income or disability. Medicare is primarily intended for seniors, though it also covers a number of disabled people. Medicaid is intended primarily for people earning only a bit more than poverty-level wages. It's not like dual-eligibles get twice as much coverage. Rather, they get some treatment covered by one program and some by the other. This can mean different doctors, different hospitals, different billings. In short, billions of dollars in extra costs because there are two systems involved. The healthcare reform law allocates new funds for streamlining entitlement coverage for dual-eligibles, making such people a potentially lucrative market for insurers. WellPoint estimates that its purchase of Amerigroup will result in more than 4.5 million Medicaid recipients falling under the company's reach in 19 states, including a "significant" number of dual eligibles. "We believe the acquisition is not only strategically important ... but will also provide an attractive return for our shareholders," said Wayne DeVeydt, WellPoint's chief financial officer. There it is yet again: Healthcare as a profit center. No one begrudges WellPoint for pouncing on a business opportunity that represents greater riches for investors. That's what for-profit companies are supposed to do. But Medicaid isn't just any program. It's a safety net for many of society's most vulnerable children and adults, jointly run by states and the federal government. Is it a perfect program? Not by a long shot. Medicaid, like much of the rest of the U.S. healthcare system, rewards doctors primarily for treating the sick, rather than keeping people well. This results in higher spending on tests and procedures, driving overall costs up. But a more serious problem is what many doctors view as Medicaid's too-low reimbursement rates. While the rates vary from state to state, healthcare providers say the fees provided by the program don't come close to the actual cost of treating patients. "There's no doubt that this has resulted in physicians refusing to take on new Medicaid patients," said Pamela Farley Short, a professor of health policy at Pennsylvania State University. We've seen that trend for a while now.