Presentation by Alice Burns, an analyst in CBO’s Budget Analysis Division, and by Ben Layton and Lyle Nelson, both of CBO’s Health, Retirement, and Long-Term Analysis Division, at AcademyHealth’s Annual Research Meeting.
States may provide Medicaid benefits either by directly reimbursing providers or by paying private health insurance plans or provider groups (called managed care organizations, or MCOs) to provide services to enrollees. This presentation examines the extent to which Medicaid benefits are delivered through MCOs and the reasons for recent growth in enrollment in and spending for managed care. CBO found that although the overwhelming majority of Medicaid beneficiaries are enrolled in MCOs, payments to MCOs account for less than half of all Medicaid spending. As for the increase in the use of managed care programs to provide Medicaid benefits, the agency found that it is largely attributable to MCOs’ expanding the types of beneficiaries, geographic areas, and range of services that they cover.