Federal spending for Medicaid managed care represented over one-third of the entire government Medicaid spending in 2014, according to a government report (GAO-16-77) released Jan. 19 that showcases exactly how states are progressively relying on managed care as they expand Medicaid coverage under the Affordable Care Act.
The Government Accountability Office report said federal spending on Medicaid managed care increased from $27 billion in fiscal year 2004 to $107 billion in FY 2014. Managed care as a percentage of total federal Medicaid spending was higher in seven of eight selected states in fiscal year 2014 compared with 2004, yet total and average per beneficiary payments by states to managed care organizations (MCOs) varied.
The importance of managed care in Medicaid-- under which states contract with MCOs to provide a specified group of programs-- has increased as states increase eligibility for Medicaid under the ACA and progressively move people with complicated health needs into managed care, the report said. States have flexibility inside broad federal guidelines to develop and execute their Medicaid programs, and as a result play a critical role in overseeing managed care.
Medicaid managed care plans serve some or all Medicaid enrollees in 39 states and DC, and more than half of all Medicaid beneficiaries obtain all or some of their care from risk-based managed care organizations.
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