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The Associated Press April 15, 2010, 12:35PM ET

UnitedHealth outlines $366B in Medicaid savings

Health insurer UnitedHealth Group Inc. said governments can ease the upcoming strain health reform will place on Medicaid systems with about $366 billion in savings over the next decade.

The Minnetonka, Minn., insurer's Center for Health Reform and Modernization on Thursday identified three main areas for potential savings for the state-federally funded Medicaid programs, which provide health coverage to low-income families with children and the disabled.

The report projects savings of about $140 billion through improved support of people with long-term care needs. This would include using programs that help people stay longer in their homes instead of moving to a nursing home and better coordination between Medicaid and Medicare.

UnitedHealth Executive Vice President Simon Stevens said in a teleconference about two thirds of Medicaid spending supports people with disabilities and long-term care needs, and that is one of the main sources of budgetary pressure on states.

Projected savings also include $133 billion from modernizing Medicaid's administrative processes. That can include encouraging electronic claims submissions and using new health information technology systems.

Stevens said about half of the roughly 32 million additional people who will receive coverage under the recently passed health care reform will get it through Medicaid. He also noted that Medicaid plans are typically the second-largest item on state budgets, and an enrollment expansion will place more pressure on them.

The report estimates the states' share of the total potential savings at around $149 billion and said some savings could be used to boost payments to primary care doctors, easing a potential shortage there.

Thursday's report was aimed at policymakers and was the third released by the UnitedHealth center. The first two came out last year and explained how the federal government could save $540 billion in Medicare spending and how health care system technology improvements can yield another $332 billion in savings.

UnitedHealth is the largest publicly traded health insurer based on revenue and second largest based on enrollment. It manages state Medicaid programs through its AmeriChoice unit.

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