OREANDA-NEWS. February 29, 2016. The Medicaid expansion provision in the Affordable Care Act (ACA) drove 31% growth in health insurance industry Medicare revenues in 2014, outpacing the 18% five year average between 2010 and 2014, according to a Fitch Ratings report Medicaid Expansion - Underwriting Margins Maintained. Future growth in industry Medicaid revenue will depend on states opting in or out of Medicaid expansion, which will largely be determined by the U.S. political climate after the 2016 presidential election.

'The Medicaid business is modestly profitable and experiences low volatility and historically has been less profitable than Medicare, however with Medicaid expansion and reimbursement reductions under the Affordable Care Act, Medicare and Medicaid are starting to achieve profit parity,' said Doug Pawlowski, Senior Director, Fitch Ratings.

Currently 30 states participate in Medicaid expansion, which under the ACA extended Medicaid eligibility to all U.S. citizen and legal residents with income up to 133% of the poverty line, including adults without dependent children.

The five largest Medicaid insurers measured by net written premium: UnitedHealth Group (UNH), Anthem Inc. (Anthem), Centene, Molina Healthcare (Molina), and WellCare Health Plans Inc. (WellCare), accounted for nearly one-half of the greater than \\$115 billion in total Medicaid premiums written in 2014. Despite modest industry margins for the Medicaid business, four of the five largest Medicaid writers reported better than industry average Medicaid underwriting margins over the most recent five-year period, according to Fitch.

The Medicaid Expansion special report is available on Fitch's website at 'www.fitchratings.com' or by clicking on the link.