Health Affairs Forefront: Supplier Concentration in Medicaid Managed Care

Medicaid managed care has become the dominant form of Medicaid delivery in the United States, with 41 states (including DC) utilizing managed care organizations (MCOs) to provide access to Medicaid. However, the market of MCOs has been consolidating, leading to a significant concentration in the industry. In 2021, the top 10 firms accounted for 64% of enrollment, with the four top firms representing 47% of enrollment. This concentration poses risks to the Medicaid program, including higher prices, lower quality, poorer service, and less innovation.

In Health Affairs Forefront, Michael Monson and Melanie Bella discuss the importance of maintaining a robust supplier pool to ensure healthy competition and good outcomes for Medicaid consumers and taxpayers. It also highlights the need for states to take actions to maintain a diverse mix of MCO types, including setting aside slots for local plans, non-profit plans and having contracts for specialized populations. The Centers for Medicare and Medicaid (CMS) and Congress also have roles to play in regulating the industry and ensuring a robust supply chain of health plans.

Read Supplier Concentration in Medicaid Managed Care – A Cause for Concern in Health Affairs Forefront.