Enrollment and spending on Medicaid managed care

Managed Care

When large expansions of Medicaid managed care began in the mid-1990s, the focus was on low-income children and families. Historically, enrollees with disabilities as well as people age 65 and older, who tend to have higher costs and more complex health care needs, were excluded or exempted from enrollment in comprehensive risk-based managed care. However, states are increasingly expanding managed care to enrollees age 65 and older and enrollees with disabilities. Today, non-disabled children and adults under age 65 are more likely to be enrolled in comprehensive risk-based managed care than aged or disabled beneficiaries, but enrollment in managed care and spending on managed care continues to grow for all Medicaid eligibility groups.

In fiscal year (FY) 2013, almost all children in Medicaid (92.8 percent) were enrolled in some type of managed care; over two-thirds (67.8 percent) of children were enrolled in comprehensive managed care (Table 1). About two-thirds (66.9 percent) of non-disabled adults under age 65 were enrolled in some form of managed care and about half (50.9 percent) were enrolled in comprehensive managed care. Persons eligible on the basis of disability and those 65 and older in some form of Medicaid managed care were less likely to be enrolled in comprehensive managed care (40.2 percent and 18.1 percent, respectively). However, many of those enrolled in Medicaid due to disability or age (53.1 percent and 40.7 percent, respectively) received some of their services through limited benefit plans, which generally cover services such as behavioral health and transportation.

TABLE 1. Distribution of Managed Care Enrollees by Eligibility Group, FY 2013

Basis of eligibility Any managed care Comprehensive managed care1 Limited-benefit plans Primary care case management
Total 77.5% 53.9% 49.5% 12.7%
Children 92.8 67.8 58.8 17.4
Adults 66.9 50.9 35.9 9.3
Disabled 70.4 40.2 53.1 11.3
Aged 47.9 18.1 40.7 2.5
Notes: FY is fiscal year. Enrollment numbers generally include individuals ever enrolled in Medicaid-financed coverage during the year, even if for a single month; however, in the event individuals were also enrolled in CHIP-financed Medicaid coverage (i.e., Medicaid-expansion CHIP) during the year, they are excluded if their most recent enrollment month was in Medicaid-expansion CHIP. Numbers exclude individuals enrolled only in Medicaid-expansion CHIP during the year and enrollees in the territories. Children and adults under age 65 who qualify for Medicaid on the basis of disability are included in the disabled category. About 746,000 enrollees age 65 and older are identified in the data as disabled; given that disability is not an eligibility pathway for individuals age 65 and older, MACPAC recodes these enrollees as aged. Figures shown here, which are based on Medicaid Statistical Information System (MSIS) data, may differ from those that use Medicaid managed care enrollment report data. Reasons for differences include differing time periods, state reporting anomalies, and the treatment of Medicaid-expansion CHIP enrollees (excluded here but included in enrollment report data). Although the enrollment report is a commonly cited source, it does not provide information on the characteristics of enrollees in managed care such as their eligibility group.
1  Includes comprehensive managed care and Programs of All Inclusive Care for the Elderly (PACE).
Source: MACPAC, 2016, analysis of MSIS data as of December 2015.

Many states are converting their managed care programs from less restrictive primary care case management (PCCM) programs to full-risk comprehensive managed care. The share of Medicaid enrollees in comprehensive managed care has grown over the past five years from 46.8 percent in 2009 to 59.7 percent in 2014, while the share of enrollees in PCCM has decreased from 14.7 percent in 2009 to 10.3 percent in 2014 (MACPAC 2016a, 2011a). The increase in comprehensive managed care enrollment has been the greatest for those eligible on the basis of disability, which has grown from 27.9 percent in FY 2008 to 40.2 percent in FY 2013 (MACPAC 2016b, 2011b).

Twenty-nine states enrolled more than half of beneficiaries into comprehensive managed care plans and seven states enrolled more than 80 percent in 2014. Eight states have only a small share of enrollees in such programs and five states have no enrollment in comprehensive risk-based managed care (MACPAC 2016a).

Twenty-one states operated PCCM programs in 2014. Seven of those states had no enrollment in comprehensive risk-based plans, while thirteen states had both comprehensive risk-based managed care and PCCM programs (one state reported a PCCM program but no enrollment). Three rural states (Maine, Montana, and South Dakota) had more than 50 percent of their enrollment in PCCM programs in 2014 and no comprehensive risk-based plan enrollment (MACPAC 2016a).

Learn more about enrollment processes in Medicaid managed care.

Spending by eligibility group

About one-third of total Medicaid benefit spending in FY 2013 was for managed care (Table 2). Most of this managed care spending was for comprehensive managed care ($129.6 billion).

Spending patterns differ dramatically by eligibility group. Over half (52.1 percent) of spending on non-disabled children and adults under age 65 was for payments to comprehensive risk-based managed care plans. By contrast, for individuals eligible on the basis of disability, only 25.2 percent of Medicaid benefit spending went to payments to comprehensive risk-based managed care plans. Only 15.7 percent of Medicaid benefit spending for those age 65 and over was for comprehensive risk-based managed care plan payments.

TABLE 2. Managed Care Spending by Eligibility Group, FY 2013

Basis of eligibility Total Medicaid spending(billions) Any managed care spending(billions) Comprehensive managed care spending(billions) Comprehensive managed care as percent of total spending
Total $401.2 $133.8 $129.6 32.3%
Children 76.4 40.5 39.8 52.1
Adults 62.2 32.9 32.4 52.1
Disabled 170.2 45.1 43.0 25.2
Aged 92.6 15.4 14.5 15.7
Notes: FY is fiscal year. Includes federal and state funds. Excludes spending for administration, the territories, and Medicaid-expansion CHIP enrollees. Benefit spending from Medicaid Statistical Information System (MSIS) data has been adjusted to reflect CMS-64 spending totals. Children and adults under age 65 who qualify for Medicaid on the basis of disability are included in the disabled category. About 746,000 enrollees age 65 and older are identified in the data as disabled; given that disability is not an eligibility pathway for individuals age 65 and older, MACPAC recodes these enrollees as aged. Spending from three states, Idaho, Louisiana, and Rhode Island, have been excluded due to data reliability concerns regarding the completeness of monthly claims and enrollment data.
Sources: MACPAC, 2016, analysis of MSIS data as of December 2015 and analysis of CMS-64 Financial Management Report net expenditure data from CMS as of June 2016.

For more information on enrollment by eligibility group and enrollment by plan type, please visit MACStats.