Citation URL: http://www.urban.org/RobertEHurley

The past decade of dramatic growth in Medicaid managed care reveals much about how states and federal officials have worked together through the waiver granting process. States have successfully navigated the waiver process to implement managed care programs and several have introduced genuine innovations to enhance the operation and effectiveness of their Medicaid programs. States have generally proven themselves to be responsible, though at times overly ambitious, innovators. States have learned from one another and often draw on other states' earlier experiences in Medicaid managed care programs. Managed care innovation has been an especially challenging enterprise for states as providers enter and leave the health care market. Forays into managed care amplified variations in state Medicaid programs that would not have been possible without the waiver process.

This paper discusses the reasons why historically low Medicaid payment rates to hospitals and physicians combined with a commitment by Medicaid agencies to support health care providers serving poor people may limit the potential savings states can achieve by moving Medicaid beneficiaries into managed care organizations.

Return to list of authors