Medicaid and CHIP Risk-Based Managed Care in 20 States. Experiences Over the Past Decade and Lessons for the Future.. Introduction

07/01/2012

The past ten years have been a period of change for state Medicaid policy and have seen the continued expansion of the Children’s Health Insurance Program (CHIP). Through numerous waivers and new laws, the federal government now provides more freedom for states to experiment with alternative ways of organizing, delivering, and paying for health services. These factors have led to an expansion of comprehensive1 risk-based Medicaid and CHIP managed care programs. In such programs, health plans (Managed Care Organizations, or MCOs) receive a fixed payment per person per month to cover particular health care services, regardless of the services rendered.

Among other reasons, states often implement risk-based managed care programs to help them achieve cost-predictability and possible cost savings. The continuing financial difficulties states have faced associated with the recent recession, along with the expiration of the temporary federal fiscal relief package passed by the American Recovery and Reinvestment Act of 2009, has led states to focus more heavily on cost containment (Smith, Gifford, Ellis, Rudowitz, & Snyder, 2011).

In the past decade, some states implemented new Medicaid managed care programs, while other states expanded existing programs to new counties or populations. In particular, many disabled people were newly included in state Medicaid managed care programs during this period. It is critical to understand these recent changes to state Medicaid and CHIP programs, as enrollment in risk-based managed care is expected to further expand in 2014 as millions gain Medicaid coverage under the Affordable Care Act. This report provides a comprehensive overview of changes to 20 state Medicaid risk-based managed care programs, with a particular emphasis on comprehensive risk-based programs, during an important time in Medicaid’s history.

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