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New Study: States Increase Transition to Medicaid Managed Care

Press Release

Published Jun 23, 2020 • by AHIP

Analysis by The Menges Group finds that more states are relying on Medicaid managed care to take on care management and administrative services, saving money and ensuring quality

WASHINGTON, D.C. – Americans with Medicaid deserve high-quality coverage and care, especially as the nation fights the COVID-19 crisis. States continue to increasingly recognize the value that Medicaid managed care plans bring to patient care and are turning to them to provide effective care management and efficient administrative services. States are also turning to Medicaid managed care’s prospective payment model as a superior cost-saving alternative to traditional fee-for-service Medicaid. Under this innovative model, Medicaid managed care plans receive a fixed payment per enrolled individual per month and ensure enrollees receive needed high-quality, cost-effective care. That’s according to new research from The Menges Group, conducted on behalf of America’s Health Insurance Plans (AHIP).

The major takeaways from today’s study include:

  • Medicaid managed care plan enrollment more than doubled (increased by 121%) between fiscal years 2010 and 2018—from approximately 26 million to over 56 million. As of 2018, more than 75% of all Medicaid enrollees were enrolled in a Medicaid managed care plan, up from about 50% in 2010.
  • Medicaid is now predominantly a managed care program. Capitated payments to Medicaid managed care plans exceed fee-for-service expenditures and have done so since fiscal year 2017.
  • States are increasingly relying on Medicaid managed care to provide care management and administrative services. States continue to shift from being active benefits administrators to providing contract management and highly-accountable oversight for Medicaid managed care plans.

“Medicaid and its safety net are more important than ever, as tens of millions of hardworking Americans have lost their jobs because of the COVID-19 crisis,” said Matt Eyles, AHIP President and CEO. “Medicaid managed care plans are working closely with state and local leaders to ensure that Medicaid remains stable and reliable to provide the high-quality, cost-effective access to care that people need and deserve. As Congress works on the next COVID-19 package this summer, it will be critical to ensure that states have the resources necessary to serve the increasing number of Americans who rely on Medicaid every day.”

Today’s announcement marks the final chapter in a series of studies on the performance of Medicaid managed care plans conducted by The Menges Group for AHIP. Previous chapters highlighted Medicaid managed care plans’ success in creating and covering telehealth program to expand access to care, as well as the ability to consistently control prescription drug costs more effectively than the traditional Medicaid program.

Read the full study.

About AHIP

AHIP is the national association whose members provide coverage for health care and related services to hundreds of millions of Americans every day. Through these solutions, we improve and protect the health and financial security of consumers, families, businesses, communities and the nation. We are committed to market-based solutions and public-private partnerships that improve affordability, value, access, and well-being for consumers. Visit for more information.