Module 2
Medicaid Managed Care
Most beneficiaries get care through private plans the state pays a fixed rate. Why that makes the state-plan contract the central value-based lever.
By the end of this module, you will be able to:
- Explain why most Medicaid beneficiaries now receive care through private managed care plans
- Describe how capitation, actuarial soundness, and the medical loss ratio govern plan payment
- Identify how a state uses its plan contracts to require value-based arrangements
- The Shift to Managed Care Most Medicaid beneficiaries now get their care through private managed care plans. This lesson explains how that happened and why it matters for value. About 4 min
- How MCO Contracts Work Capitation, actuarial soundness, and the medical loss ratio: the three rules that govern how states pay Medicaid managed care plans. About 5 min
- The Contract as a Policy Lever In managed care states, the state-plan contract is where value-based care actually happens. This lesson shows how states drive value through what they require of plans. About 5 min
- Overseeing Managed Care Handing care to private plans requires guardrails. This lesson covers access, quality, and the 2024 federal rule that tightened both. About 5 min
Module quiz
Answer all questions to see your score.
1. Roughly what share of Medicaid beneficiaries are enrolled in managed care?
Around 73 percent of beneficiaries are in managed care, so for most people 'having Medicaid' means being enrolled in a plan rather than billing the state directly.
2. The medical loss ratio (MLR) floor requires Medicaid MCOs to spend at least what share of capitation on care?
Since 2019, states must set rates so each MCO can reasonably achieve an MLR of at least 85 percent, leaving no more than 15 percent for administration and profit.
3. In a managed care state, how does the agency most directly push providers toward value?
Because plans sit between the state and providers, the contract is the lever: states require plans to move payments into value-based arrangements and grade them on results.