Medicaid managed care: there's more for states to do

Medicaid is a cornerstone of this country's health care system, covering over 50 million people and supplying one in five health care dollars in the United States. Medicaid is again a contested issue in state capitols, where states facing sluggish revenues target Medicaid since it is the second largest and fastest growing component of state spending. Managed care was the policy tool many states embraced in order to slow Medicaid spending, and while managed care has had some successes in improving Medicaid services, it has not met states' expectations for cost savings. This analysis explores several reasons why these savings have not been realized, and proposes policy reforms for state Medicaid programs that would make Medicaid coverage more stable, thereby increasing the ability of managed care plans and network providers to work with Medicaid beneficiaries to change patterns of care and realize real savings.