Medicaid Managed Care in 2022: The Year that Was

2022 was another year of growth in Medicaid managed care. Growth in enrollment. Growth in spending. There was even a modest—but most welcome—growth in transparency about the performance of Medicaid managed care organizations (MCOs) from 2021. Here are some of the top-line developments at the national and state level.

The MCO Industry

As of March 2022, per the essential KFF Medicaid managed care tracker, a total of 283 MCOs were contracting with 40 states and the District of Columbia. Of these MCOs, just under half (117) were owned by five large parent companies: Aetna/CVS Health, Centene, Elevance Health (formerly Anthem), Molina, and UnitedHealth Group. During the first three quarters of 2022, these firms reported strong growth in Medicaid enrollment (4.8 percent) and revenues (10.6 percent), driven in large part by the suspension of Medicaid disenrollments during the Covid-19 Public Health Emergency (PHE). Given these trends, and the financial results they imply, it is not surprising that competition for state contracts to enroll Medicaid beneficiaries remained fierce. The outcome of these procurements matters to children and families: as of July, 36 states reported enrolling at least 75 percent of their Medicaid children in MCOs.


The new management at CMS continued its focus on the monitoring and oversight of Medicaid managed care (in 2022 the federal government paid about 67 percent of the cost). In June 2021, CMS announced that it would—finally—begin enforcing the requirements in its 2016 managed care regulations for annual state reporting, using standardized data formats, on managed care programs overall, the medical loss ratios of MCOs, and network adequacy and access standards. This past July, CMS reaffirmed the reporting deadlines and the requirements for using standard reporting templates for each report. For example, states with MCO contracting periods that ended June 30 are required to submit their Managed Care Program report by December 27. If states actually complete these report templates and submit them on time, and if CMS posts the submissions (or requires states to do so), this will mark a promising breach in the culture of opacity enveloping Medicaid managed care and create opportunities for advocates to better understand how managed care is working in their states.

CMS management also signaled an intent to pursue regulatory action to improve access to care in Medicaid managed care. In February, CMS published an RFI on “Access to Coverage and Care in Medicaid & CHIP,” asking for feedback on how to establish minimum standards for equitable and timely access to providers and services in both fee-for-service and managed care Medicaid, and how to monitor states’ performance against those standards. The period for comments ended in April, which, as it happened, fell in the spring 2022 target date CMS had announced that it would be proposing policy and reporting changes to its managed care regulations to, among other things, “ensure access to care for Medicaid managed care enrollees.” That proposed rule is now expected in spring of 2023.


Membership in the State MCO Club did not change in 2022: the same 40 states and the District of Columbia continued to contract with MCOs as in the previous year. (Similarly, the number of states relying on taxes imposed on MCOs to help finance their Medicaid programs remained unchanged at 18). Vermont tried to join the Club in a singular way but came up short. As part of a request to extend its section 1115 demonstration, Vermont sought approval from CMS for a single-payer-like proposal to operate its own statewide MCO. CMS did not approve the proposal, so the state continues to run a managed care program through its Medicaid agency that is not at financial risk.

As Medicaid enrollment increased generally, enrollment in MCOs in the 40 states and DC grew as well. In addition, five states expanded the types beneficiary populations for whom enrollment in MCOs is mandatory. In July, Missouri began enrolling foster care children and youth in one statewide MCO, expanding the natural experiment underway in the delivery of services to this population. Investigative reporting raised disturbing questions about this single-MCO approach for foster children and youth in Illinois.

Procurements kept coming. California, Delaware, Iowa, Minnesota, Nebraska, New Mexico, and Oklahoma, which will be joining the MCO Club next year, all launched procurements to contract with MCOs for their general Medicaid populations. (West Virginia issued a request for proposal for a single MCO to manage care for foster care children and youth). The largest of the RFPs was California’s, designed to align with the state’s new section 1915(b) managed care waiver. It was also a Transparency Event. When the state announced the winning proposals in September, it also made the proposals submitted by all bidders public. In the case of Centene, Elevance, and Molina, those proposals contain information on the performance of MCO subsidiaries operating not just in California but in other states as well; that database is available here.


In September my colleague Hannah Klukoff explained that significant research findings relating to Medicaid managed care were published in 2022 concerning health equity, COVID-19 and the PHE unwinding, and the post-Dobbs world in which we now find ourselves. Since that blog was posted, Urban Institute researchers published an analysis of the first year of the transition from fee-for-service to risk-based managed care in North Carolina. According to the researchers, stakeholders and beneficiaries “praised” the NC Medicaid Ombudsman, an advocate for managed care beneficiaries operated by Legal Aid and Legal Services organizations, as “valuable and efficient in representing beneficiaries and resolving problems.”

MACPAC published a number of helpful issue briefs explaining selected managed care issues (directed payments, setting capitation rates, and medical loss ratios), as well as a detailed slide deck on procurement. The Kaiser Family Foundation’s Medicaid budget survey for state FYs 2022-2023 includes data on state use of financial incentives and contract requirements tied to MCO performance on health equity metrics. The consultancy HMA published an analysis of preliminary information on 2021 spending for Medicaid managed care that includes state-specific data. And the National Health Law Program posted a report analyzing MCO sanctions in nine states: Arizona, California, Florida, Hawaii, Missouri, New Hampshire, Ohio, Oregon, and Tennessee.

As we say in the trade, more research is needed. How are individual MCOs performing for children and families on access, quality, and health equity? Which MCOs are performing poorly, and why? What can state agencies, beneficiary advocates, and CMS do to drive improvement by low performers and high performers alike?

One resource for such research is the California procurement database, which, for three of the largest Medicaid managed care companies, allows for subsidiary-specific analysis of grievances, enforcement actions taken, and quality metrics. What, if any, is the relationship between an MCO’s quality metrics and grievances? Do enforcement actions taken by a state make a difference in an MCO’s performance on quality metrics over time?

Looking Ahead

2023 is likely to see the unwinding of the PHE protections against termination of Medicaid coverage. The timing and course of the unwinding in each state is uncertain, but that there will be disruption is not. Among many concerns is that the provider-patient relationships for MCO enrollees who lose their Medicaid eligibility upon redetermination may be severed if those individuals aren’t able to find other coverage, or if they do establish other coverage (say, through a Marketplace plan) but the provider networks are different because the network adequacy standards are different.

This massive enrollment event will unavoidably divert attention and resources from other Medicaid policy priorities, including transparency about the performance of individual MCOs. In the face of this headwind, will the modest progress that transparency made in 2022 continue? Time will tell, of course, but the culture of opacity in Medicaid managed care remains pretty firmly entrenched. Unwinding it will require ongoing efforts by state and federal policymakers alike.

CMS could lead the way by standing up a Medicaid MCO performance dashboard using data it already has (or is about to collect) from the states. This would add an important tool to the CMS oversight tool kit, greatly increasing the ability of advocates and the public to assist CMS in holding individual MCOs accountable for their performance—all without increasing Medicaid spending or imposing new reporting burdens on states.

Just sayin’.


Andy Schneider is a Research Professor at the Georgetown University McCourt School of Public Policy.