Medicaid Managed Care: Trends, Transparency, and the Role of State Reporting

Managed care is now the dominant model for delivering Medicaid services, serving a significant majority of beneficiaries and accounting for a substantial portion of total Medicaid spending. As of July 2024, approximately 78% of Medicaid beneficiaries – over 66 million individuals – receive their care through risk-based managed care organizations (MCOs). This represents about 50% of total Medicaid spending, exceeding $458 billion in fiscal year 2024. Still, the landscape of Medicaid managed care is constantly evolving, with increasing attention being paid to transparency and accountability.

The Growth of Managed Care in Medicaid

While not all state Medicaid programs utilize MCOs, a growing number do, and states are expanding their use of these organizations to serve a wider range of beneficiaries. This includes those with complex medical needs, individuals requiring long-term services and supports, and, in states that have expanded Medicaid under the Affordable Care Act (ACA), newly eligible low-income adults. As of July 2022, states were contracting with over 280 individual Medicaid managed care organizations, encompassing a mix of private for-profit, private non-profit, and government plans.

Complex Contracts and Evolving Federal Oversight

Medicaid Managed Care contracts are significant financial undertakings for states, frequently exceeding billions of dollars annually. States retain primary responsibility for monitoring and overseeing managed care plans, but federal rules have evolved over time to provide guidance and oversight. Historically, publicly available data on managed care performance has been limited and inconsistent across states, hindering transparency and accountability.

Significant changes to Medicaid managed care rules and regulations occurred in both 2016 and 2024, focusing on beneficiary protections, access to care, and program oversight. These changes included modern reporting and oversight requirements, as well as efforts to increase transparency. The Trump administration initially relaxed some managed care requirements in 2020, but maintained the managed care reporting requirements. The Centers for Medicare and Medicaid Services (CMS) continues to publicly post state managed care reports on Medicaid.gov.

The Managed Care Program Annual Report (MCPAR)

A key component of increased transparency is the Managed Care Program Annual Report (MCPAR). This relatively new, comprehensive report, submitted annually by states to CMS, includes plan-level data. It complements other managed care reports aimed at improving state and federal monitoring, oversight, and transparency of managed care programs. Future analysis by organizations like the Kaiser Family Foundation (KFF) will delve into policy-relevant metrics derived from this data.

State-Level Variation and Managed Care Options

States have considerable discretion in determining which populations and services to include in managed care arrangements, leading to significant variation across states. Ohio, for example, allows Medicaid beneficiaries to choose from a variety of managed care plans to find the best fit for their needs. More information on Ohio’s managed care options is available on the state Medicaid website.

Looking Ahead

The Medicaid managed care landscape continues to evolve, with ongoing efforts to enhance access to care, improve quality, and increase transparency. The continued collection and analysis of data, such as that provided through the MCPAR, will be crucial for informing policy decisions and ensuring that managed care programs effectively serve the needs of Medicaid enrollees. The end of the unwinding of the public health emergency continuous eligibility requirement will as well continue to shape the managed care landscape as states reassess eligibility requirements.