There has been significant growth in Medicaid risk-based contracting during this decade. As Medicaid managed care has evolved, it has expanded to include the coverage of persons with more complex health needs. Not only are the more ‘traditional’ Medicaid beneficiaries such as AFDC families, low-income children and pregnant women receiving their health care through managed care plans, but an increasing number of coverage groups with special health care needs are being covered. Medicaid managed care is seen by states as an opportunity to control costs and to provide beneficiaries with access to quality care.
As states transition their Medicaid programs to managed care they face certain challenges in designing benefit packages that meet the needs of Medicaid beneficiaries. Those challenges increase as states begin to integrate disabled individuals and the elderly who receive Medicaid into prepaid plans. This article examines the benefit design issues that states and managed care plans must consider when extending risk-based coverage to Medicaid enrollees. In risk-based managed care, a Medicaid agency contracts with an entity to provide or arrange for an agreed upon set of services in exchange for a set monthly rate per enrollee. We look at what benefits states include in their managed care contracts for Medicaid enrollees and whether those differ, depending on the covered population. We focus on some of the key benefits and services that can make an effective managed care delivery system for Medicaid enrollees. The data on covered benefits in risk-based contracts is from the National Academy for State Health PoIicy’s third edition of Medicaid Managed Care: A Guide for States, published in 1997, (10) which includes an extensive survey of the 50 states and the District of Columbia, conducted in 1996. Previous editions of this Guide and their corresponding surveys were issued in 1990 and 1994.