Managed Care

Managed Care

The Future of Integrated Care Programs for Dually Eligible Individuals in Massachusetts: Key Takeaways from the Fall 2025 MAHP/HMA Policy Forum

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Health Management Associates (HMA) recently co-hosted a policy forum with the Massachusetts Association of Health Plans (MAHP), entitled Advancing Better Outcomes: How the One Care and SCO Programs Improve Health for Older Adults and People with Disabilities on Medicare and Medicaid. More than 100 key decision makers from MassHealth (Medicaid), health plans, providers, community-based organizations, and advocacy organizations attended the conference, elevating the value of the MassHealth One Care and Senior Care Options (SCO) programs to dually eligible individuals. The policy forum also provided an important opportunity for state legislators and their staff to learn about these complex programs.

MassHealth One Care and SCO Programs

Massachusetts’ One Care and the SCO programs currently serve more than 125,000 individuals covered under MassHealth and Medicare, also known as dually eligible individuals. One Care is a population-specific program for dually eligible adults 21-64 years of age. SCO is a population-specific program for dually eligible older adults 65 and older, tailored to the needs of older adults. The One Care and SCO programs serve individuals with complex chronic conditions and disabilities, including mental health and substance use disorder needs, and high home-and-community-based service (HCBS) needs. The One Care and SCO programs advance independent living, recovery, and community living goals. Approximately 99 percent of One Care enrollees, and 95 percent of SCO enrollees, live in the community.

The One Care program is currently authorized as a Financial Alignment Initiative (FAI) demonstration program. The FAI demonstration ends December 31, 2025. MassHealth will continue the One Care program as a Fully Integrated Dual Eligible Special Needs Plan (FIDE SNP) model. This transition from the FAI to a FIDE SNP model introduces changes to the program. A FIDE SNP model is a type of Medicare Advantage (MA) Dual Eligible Special Needs Plan (D-SNP).

HMA’s Role: Bringing National and State Expertise

In addition to creating the forum in partnership with MAHP, HMA shared its national and state policy expertise and local market insights with attendees during a series of presentations. HMA outlined ways in which the One Care and SCO programs offer more value to dually eligible individuals than the state’s fee-for-service (FFS) system.

The event focused on three key topics:

  • The national landscape for Medicare-Medicaid integrated care programs.
  • The value of the One Care and SCO programs and the role that health plans play in improving outcomes for adults who are eligible for both Medicare and Medicaid (“dually eligible”), and
  • The upcoming changes to the One Care and SCO programs, as reflected in the 2026 state Medicaid agency contracts (SMACs) with MassHealth.

Key Takeaways from the MAHP-HMA Conference

Key Takeaway #1. Nationwide trends suggest that Medicare-Medicaid integrated care programs will face competition and financial pressures.

Forum attendees were very interested in the national trends. At the national level, D-SNPs have bipartisan support. At the same time, D-SNPs should expect competition from Chronic Condition Special Needs Plans (C-SNPs) and innovation models developed by the Centers for Medicare and Medicaid Innovation (CMMI). CMMI models such as the Guiding an Improved Dementia Experience (GUIDE) Model and Accountable Care Organizations (ACO) Realizing Equity, Access, and Community Health (REACH) Model will compete with D-SNP models in some markets. Finally, presenters and panelists alike raised concerns about the financial risks that D-SNPs will face due to rising pharmacy costs and changes in Medicare payment methodologies.

Key Takeaway #2. The Massachusetts One Care and SCO programs provide significant value to dually eligible individuals in Massachusetts.

The One Care and SCO programs provide significant value to enrollees. As compared to FFS, Medicaid-Medicaid integrated care programs like One Care and SCO provide care coordination, a personal care plan, bundling prescriptions through a single provider, and other services.

Many forum attendees pointed out that the One Care program is one of the most advanced integrated care programs in the nation. One Care’s success is tied in part to the active and critical role that the One Care Implementation Council plays in shaping program policy. For more than a decade, the One Care Implementation Council and MassHealth have worked in partnership to improve the program. As shared by the Massachusetts Medicaid Policy Institute (MMPI): “The Commonwealth intends to preserve the Implementation Council’s role in the next phase of One Care, and to continue engaging the council as an essential partner in policy and program change, monitoring, and oversight.”

Key Takeaway #3. Over the last two decades, SCO and One Care plans have established many innovations.

The forum highlighted many innovations in these programs, from primary and urgent home care to place-based supports. It also provided an opportunity to talk about the important role and commitment that the plans have in emergency situations to ensure that members are safe in the face of a community crisis.

Panelists see many opportunities for plans to continue to evolve and improve outcomes and equity. For example, the One Care program has significant opportunities to address the behavioral health needs of dually eligible adults. Dually eligible adults with mental health and/or substance use disorder diagnoses are at higher risk of an emergency department visit and inpatient stay than other enrollees. Health plan per member per month (PMPM) spending on inpatient services for those with a behavioral health condition is much higher as a share of the total PMPM than other populations. The HMA data pointed to a need for further innovation in the mental health arena to advance better outcomes of quality of life and costs.

Key Takeaway #4. Conference attendees focused on the importance of addressing enrollees’ social determinants of health needs.

Throughout the day, the importance of community and addressing the social determinants of health (SDOH) was a common theme. Aging and disability leaders spoke about the importance of community organizations such as Aging Services Access Points (ASAPs), independent living centers (ILCs), recovery learning communities (RLCs) including peer support since most  One Care and SCO individuals live in the community.

Many One Care and SCO eligible individuals are often just one unmet health related social need away from the risk of hospitalization or institutionalization. Other attendees underscored the risk that enrollee living situations and recovery can become instantly unstable due to the death of an important family member. One aging leader described her role as “triaging risk.” Other leaders from the disability community urged plans to use z codes to improve plan and provider attention to identify and address the SDOH needs.

Looking Ahead

As Massachusetts prepares for the 2026 One Care and SCO contract year, the forum underscored the progress made over the past decade and the opportunities ahead to improve care coordination, collect z codes, and invest in outcomes-driven partnerships. Massachusetts is well-positioned to continue leading the nation in designing integrated care programs that improve health and support community living for older adults and people with disabilities.

HMA looks forward to supporting all organizations including state Medicaid programs and health plan and provider associations as they convene stakeholders to improve their integrated care programs. Our expertise includes program planning, strategy and implementation, technical support and evaluation, and state-specific knowledge to make projects successful. Please contact Ellen Breslin, Rob Buchanan, and Julie Faulhaber for more information on how HMA can help your organization.

Summary Facts About the One Care and SCO Programs
The One Care and SCO programs are population-specific programs, serving more than 125,000 individuals with MassHealth plus Medicare coverage.   MassHealth designed the One Care and SCO programs around the specific needs, preferences and goals of adults and older adults.The One Care program enrolls dually eligible adults with disabilities, ages 21-64 at the time of enrollment, covered under MassHealth Standard or CommonHealth and Medicare (Parts A and B, and eligible for Part D). Enrollees in One Care have multiple chronic conditions and disabilities including significant mental health and substance use disorder needs. The SCO program enrolls dually eligible adults ages 65 and older, covered under MassHealth Standard and Medicare (Parts A and B, and eligible for Part D). SCO enrollees have significant chronic conditions, many of which are associated with aging.
MassHealth launched the SCO program in 2004 and One Care in 2013.   The One Care program currently operates as a Financial Alignment Initiative (FAI) demonstration. The One Care and the SCO programs combine MassHealth & Medicare benefits into a single plan with one card and one care team. One Care covers medical, mental health, and prescription medications, plus support for daily tasks and independent living and recovery. Care coordinators help members stay healthy and get the services they need.
The One Care and SCO Programs Continue to Evolve. The FAI demonstration authority ends in 2025. Massachusetts will shift from the demonstration to a Fully Integrated Dual Eligible Special Needs Plan (FIDE-SNP) structure. The SCO program currently operates as a FIDE SNP model. The state reprocured the One Care and SCO plan network. The state selected five One Care plans and six SCO plans. New contracts for One Care and SCO plans start January 1, 2026.The new contracts create several changes including changes in eligibility for the program and enrollment processes, benefits, and financial payment provisions.

CMS Clarifies Grandfathering Rules for State Directed Payments

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The Centers for Medicare & Medicaid Services (CMS) last month issued a letter to states providing preliminary guidance on Medicaid State Directed Payments (SDPs), which outlines new federal payment limits, clarifies grandfathering provisions, and signals significant changes ahead for Medicaid financing and policy. The letter is part of CMS’s implementation of Section 71116 of the Budget Reconciliation Act of 2025 (OBBBA, P.L. 119-21)—the portion of the legislation that focuses on curbing SDP spending and reinforcing program integrity.

Though CMS describes the guidance as preliminary, it is the view of Health Management Associates (HMA) experts—including former state officials, actuaries, and policy strategists—that it signals directionally new policy for Medicaid agencies, managed care organizations (MCOs), and providers. CMS is working on two proposed SDP-related regulations, which are in the final stages of federal review. The preliminary guidance and forthcoming rules will likely reflect long-standing concerns for several years, even over shifting congressional control and multiple presidential administrations.

This article addresses key clarifications in the letter; the impact of the preliminary guidance on states, MCOs, and providers; and how the directive may influence Medicaid budgets, financing strategies, and future policy reforms.

Guidance Clarifies Timeframes for SDPs

Grandfathering Limited to Specific Rating Periods

CMS will allow states to maintain SDP spending amounts, up to the average commercial rate ceiling, that were in place for state fiscal year (SFY) 2025, calendar year (CY) 2025, and SFY 2026 rating periods. Nonetheless, new or expanded SDPs above Medicare equivalent levels in expansion states and 110 percent of Medicare in non-expansion states—even those based on legislation passed in 2025—are ineligible for grandfathering if they apply to rating periods starting after July 4, 2025. These grandfathered spending amounts will need to phase down with rating periods beginning on or after January 1, 2028.

Preliminary Grandfathering Determinations

CMS has begun notifying states whether a preprint is “likely eligible” for grandfathering. Because these are preliminary determinations, states should prepare for further review and revisions.

Submission Cutoff Date Clarified

In response to confusion around the May 1, 2025, submission deadline, CMS clarified that July 4, 2025, is the cutoff for grandfathering eligibility, provided the state fully completed the preprint. States may have rushed to meet a July 4 submission deadline and may have left questions on the preprint unanswered. In these instances, it is possible—if not likely—that CMS will consider the application incomplete and thus ineligible for grandfathering. Since this is a developing area with limited precedent, states may still seek clarification or reconsideration, though CMS has not yet issued definitive guidance or a formal process for resolving these situations.

No Increases Allowed Until 2028

States are prohibited from increasing the total dollar amount of grandfathered SDPs—the “expected spend”—until January 1, 2028. This restriction limits flexibility for states to expand their programs and may require that they reassess their SDP strategies. For example, using percentage-based calculations tied to average commercial rates, will no longer capture year-to-year growth because of utilization or acuity changes.

10 Percent Phasedown Unaddressed

CMS has yet to provide official guidance on the 10 percent phasedown of SDPs. Stakeholders remain in a holding pattern, awaiting a forthcoming proposed rule that will clarify how reductions will be calculated.

What It Means for States and Healthcare Organizations

SDPs have become a critical tool for states to stabilize provider networks through increased Medicaid reimbursement. This authority will be significantly limited, and states will need to reduce many existing programs. Medicaid enrollment losses resulting from other Medicaid policy changes, such as work requirements and minimum semiannual redetermination, will likely compound the strain on provider payments.

Providers and states need to start planning for these losses in revenue now. Strategic planning for SDP sustainability and close monitoring of upcoming CMS rulemaking is essential.

While the guidance imposes constraints, it also opens the door for policy innovation. For example, some states may use this moment to reform Medicaid financing, streamline supplemental payments, and reconfigure provider incentives to better reflect quality and access, advancing value-based care goals and achieving total cost of care savings through efficiency and aligned incentives.

Connect with Us

HMA is uniquely positioned to support states, MCOs, and providers as they navigate the evolving landscape of Medicaid SDPs. Our team includes former state Medicaid directors, actuaries, and policy strategists with deep expertise in designing sustainable financing arrangements and guiding public engagement processes. We bring robust modeling capabilities to clients seeking to assess the financial impact of CMS’s new restrictions, including the 10 percent phasedown and interactions with provider tax limitations. Our experts are actively engaged with CMS and understand how to translate federal guidance into actionable strategies that align with state goals and operational realities.

Whether revising preprint submissions, evaluating quality frameworks, or rethinking provider incentives, HMA delivers the technical and policy insight needed to move forward with confidence.

For questions about the federal guidance and considerations for your organization, contact our experts below.

HMA Enrollment Update: Medicaid Managed Care Organizations See Drop in Enrollment in 2Q25

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This week, our second In Focus provides insights into Medicaid managed care enrollment in the second quarter of 2025. Health Management Associates Information Services (HMAIS) obtained and analyzed monthly Medicaid enrollment data in 30 states,[1] offering a reliable baseline and timely view of the immediate impact of the current policy landscape as new federal policies take effect.

This analysis presents a snapshot of HMAIS’s comprehensive detailed quarterly Medicaid managed care enrollment report (available by subscription), which includes plan-level information for nearly 300 health plans in 41 states, corporate ownership, for-profit versus not-for-profit status, and similar information regarding publicly traded plans. Table 1 provides a sample of enrollment trends, representing 57 million Medicaid managed care enrollees of a total of 66 million Medicaid managed care enrollees nationwide. Data reporting periods and program coverage vary by state, so figures may not be fully comparable.

Key Insights from 2Q25 Data

The 30 states included in our review have released monthly Medicaid managed care enrollment data—via a public website or in response to a public records request from HMAIS—for April through June of 2025. This report reflects the most recent data posted or obtained from states. HMA has made the following observations regarding the enrollment data:

  • Year-over-year decline. As of June 2025, in the 30 states reviewed, Medicaid managed care enrollment declined by 1.6 million members year-over-year, a 2.7 percent drop from June 2024.
  • Widespread decreases. Of the 30 states, 27 experienced enrollment declines in June 2025 compared to June 2024. Oregon and the District of Columbia saw modest growth, while California remained flat (Table 1).
  • Sharpest contractions. Arizona and Maryland reported double-digit percentage drops in enrollment in June 2025 (Table 1), underscoring the uneven impact of redeterminations and eligibility policy changes.
  • Difference among expansion and non-expansion states. Among the 24 states included in the analysis that expanded Medicaid, enrollment fell by 1.2 million—a 2.5 percent drop—to 49.2 million. The six non-expansion states saw a steeper proportional decline of 4.2 percent, to a total of 8 million enrollees.

Table 1. 2Q25 Monthly MCO Enrollment by State, April–June 2025

Note: “+/- m/m” refers to the enrollment change from the previous month, and “% y/y” refers to the percentage change in enrollment from the same month in the previous year.

The data in Table 1 should be viewed as a sampling of enrollment trends across these states rather than as a comprehensive comparison, which cannot be established based solely on publicly available monthly enrollment data. It is also important to note the limitations of the data presented. For example, not all states report data at the same time during the month, resulting in a range of snapshots from the beginning to the end of the month. Second, in some instances, the data cover all Medicaid managed care programs, while in others they reflect only a subset of the broader managed Medicaid population, depending on what data is publicly available.

Market Share and Plan Dynamics

HMAIS’s report includes plan-level details for nearly 300 plans, covering corporate ownership, program participation, and tax status. As of June 2025, Centene continues to lead the national Medicaid managed care market with 17.8 percent share, followed by Elevance (10.4 percent), United (8.6 percent), and Molina (6.2 percent; see Table 2).

Table 2. National Medicaid Managed Care Market Share by Number of Beneficiaries for a Sample of Publicly Traded Plans, June 2025

What to Watch

The OBBBA (P.L. 119-21) calls for significant changes to Medicaid eligibility and enrollment policies, including work requirements and more frequent eligibility redeterminations. Projections indicate that Medicaid and Children’s Health Insurance Program enrollment could decline by up to 7.5 million people by 2034. In addition, the Centers for Medicare & Medicaid Services (CMS) has announced that it will not approve or extend waivers for multi-year continuous eligibility for adults or children.

As these policies are implemented, state governments and healthcare organizations should prepare for increased administrative complexity, potential coverage disruptions, and the resulting effect on MCO revenue and value-based care arrangements.

Connect with Us

HMA is home to experts who know the Medicaid managed care landscape at the federal and state levels. As the Medicaid landscape continues to evolve, HMAIS equips stakeholders with timely, actionable intelligence, including enrollment data, quarterly by-plan and by-state enrollment reports, financials, Medicaid demonstration and Rural Health Transformation program tracking, and a robust library of publicly available Medicaid-related documents. HMAIS combines publicly available information with HMA expert insights on the structure of Medicaid in each state, as well as our comprehensive, proprietary State Medicaid Overviews.

For questions about the HMAIS enrollment report and information about the HMAIS subscription, contact our experts below.

Medicaid Managed Care Profitability: Navigating Margin Pressures and Regulatory Shifts in 2024

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This week, our In Focus section highlights findings from Health Management Associates Information Services’ (HMAIS’s) review of 2024 statutory filings submitted to the National Association of Insurance Commissioners (NAIC). These filings provide a nationwide view of Medicaid managed care plan profitability and medical loss ratios (MLRs) across 221 plans operating in 39 states, the District of Columbia, and Puerto Rico.

These data build upon and offer additional context to a previous analysis conducted by HMA and Wakely, an HMA Company, of increasing post-pandemic financial pressures driven by acuity increases resulting from the continuous eligibility unwinding and increases in behavioral health and home and community-based services access and utilization.

Medicaid Managed Care Underwriting Gains and Losses

As state Medicaid programs have increasingly moved from fee-for-service to managed care, a foundational assumption has been that efficient managed care organizations (MCOs) reduce waste and deliver high quality, cost-effective healthcare services. This transition has made Medicaid plan performance and sustainability a central focus for policymakers and actuaries alike.

Medicaid capitation rates must be actuarially sound, which means they must be projected to cover all “reasonable, appropriate, and attainable costs,” including medical administrative costs, plus a margin for insurance risk, even for nonprofit plans. According to the Society of Actuaries 2024 research, average underwriting margins in Medicaid rates ranged from 0.35 percent to 3.15 percent, with a consistent average between 1.2 percent and 1.3 percent.

However, actual results often deviate from projections for reasons that may be challenging to predict. Rate setting is an inherently forward-looking process, and even with conservative assumptions, unexpected shifts in enrollment, acuity, or service utilization can lead to significant deviations from projected results. Retrospective reviews show variability in margins over time (see Figure 1).

Figure 1. Historical Medicaid MCO Net Gains/Losses, 2012‒2024 (39 States, DC)

Based on HMAIS’s analysis, Medicaid MCOs sustained modest but steady gains from 2012 through 2017. After a decline between 2016 and 2019, margins rebounded to approximately 3 percent until 2022, narrowed in 2023 to 1.9 percent, and turned negative in 2024 at -0.9 percent.

For the first time in over a decade, more plans experienced losses than gains in 2024 (see Figure 2), with only 42 percent reporting positive margins, down from the decade high of 84 percent in 2022. This shift raises critical questions about sustainability and participation in Medicaid managed care.

Figure 2. Medicaid Managed Plans Likelihood of Gain, 2012‒2024 (39 States, DC)

The “Likelihood of Gain” chart tracks the percentage of Medicaid managed care plans reporting an underwriting gain each year from 2012 to 2024. For most years, the likelihood that a plan posted a gain was relatively high, typically between 60 percent and 80 percent. The probability reached a recent peak in 2022, with 84 percent of plans reporting gains, and remained elevated in 2023 (74 percent). In 2024, however, the likelihood of gain dropped sharply to just 42 percent, the lowest level in the 12-year period.

Risk Corridors, Medical Loss Ratios, and Structural Policy Shifts

MLRs show the portion of plan revenue spent on medical care as compared with the costs to operate the plan and the underwriting gain or loss described previously. When MLRs rise or fall, it can be an indication that medical cost trends experienced by health plans differ from the assumptions used by state rate setting actuaries. High MLRs are the key driver of underwriting gains, and low MLRs are associated with higher profitability. All states report MLRs to the Centers for Medicare & Medicaid Services (CMS), and some enforce minimum MLRs with a remittance provision, requiring plans to return funds if their MLR goes below a certain level.

Risk corridors are another tool that states use to manage financial volatility. These mechanisms share gains or losses between plans and states when results deviate significantly from pricing assumptions, offering protection to MCOs and the state alike, in contrast to minimum MLR provisions with a remittance provision, which only protects the state. During the COVID-19 pandemic, many states implemented or expanded risk corridors to recoup overpayments because of lower utilization. Some risk corridors were set retroactively—a practice CMS now prohibits.

In 2024, MLRs reached a decade high of 90.8 percent, as indicated by HMAIS’s analysis. Driving this increase were heightened utilization rates, increased enrollee acuity, and the end of continuous Medicaid coverage protections in 2023. As healthier, lower-cost members left Medicaid, plans were left serving a more complex population with higher per-member costs. Inflation in medical costs—especially for behavioral health and home and community-based services—added more pressure. Delayed or avoided care during the COVID-19 pandemic may also have played a role, as members sought more services in 2022‒2024, resulting in a surge in utilization greater than what was priced into rates.

Many states put risk corridors in place to stabilize margins from 2020 to 2022, which may have contributed to the tight band of outcomes around the high underwriting gains in that period. However, many states have been removing them for 2024, 2025, and 2026. Without these protections, plans may face greater exposure to underpayment in 2025 and 2026 if cost trends continue to outpace rate assumptions.

What to Watch

Rate setting conversations between states and plans for 2026 are happening now, and in many cases they are quite challenging. In addition to meeting actuarial soundness requirements, states also must balance their budgets, and some may be facing limitations on their traditionally used tools.

Looking ahead, it will be increasingly important that states and plans partner to find cost savings that can ensure the program’s long-term sustainability.

A subscription to HMAIS provides access to comprehensive financial intelligence on Medicaid managed care. Far beyond surface-level snapshots, HMAIS delivers health plan-level financial performance metrics, enrollment trends, and state policy developments that directly shape rate setting and operational strategy. Whether you’re a state official, health plan executive, or policy strategist, HMAIS provides the financial clarity and policy context needed to anticipate regulatory shifts, benchmark performance, and make confident, data-driven decisions.

For questions about the analysis discussed in this article, contact our experts below.

Disaggregating Managed Care Payments: New Insights into Medicaid Spending

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As states and stakeholders seek greater transparency and accountability in Medicaid, a new analysis from Health Management Associates (HMA), offers a fresh perspective on how dollars flow through the system. Drawing on publicly available data from the Transformed Medicaid Statistical Information System (T-MSIS), HMA disaggregated funding dispersed to Medicaid managed care organizations to discern spending for specific categorically eligible populations. The findings significantly enhance policy discussions and can facilitate development of pragmatic and specific care management interventions that support quality patient care.

For policymakers, regulators, and other stakeholders, this level of disaggregation provides a clearer view of how public dollars are used—and where there may be opportunities to improve performance or reinvest savings. It also supports more informed rate development and contract negotiations, particularly as states pursue value-based purchasing and other reforms. As Medicaid continues to evolve, especially in the context of budget pressures and changes in enrollment and risk profiles of enrollees, understanding the financial picture of managed care programs is essential to ensuring sustainability.

HMA’s team of experts—including actuaries, former Medicaid directors, and data analysts—has deep experience working with T-MSIS data and advising states, plans, and providers on Medicaid program analysis, evaluation, and strategy. For more information about working with T-MSIS data and the insights it can provide, contact our experts below.

Medicaid Managed Care Enrollment Update – Q1 2025

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In this week’s In Focus section, Health Management Associates Information Services (HMAIS) draws on its database of monthly enrollment in Medicaid managed care programs to provide the latest quarterly analysis of Medicaid managed care enrollment, offering a snapshot of developments across 28 states. [1] The data and insights are particularly timely as stakeholders, including states, Medicaid managed care organizations (MCOs), hospitals and health systems, and providers, continue to plan for multiple possible federal policy changes and the operational realities that will follow.

HMAIS also compiles a more detailed quarterly Medicaid managed care enrollment report representing nearly 300 health plans in 41 states. The report provides by plan enrollment plus corporate ownership, program inclusion, and for-profit versus not-for-profit status, with breakout tabs for publicly traded plans. Table 1 shows a sampling of plans and their national market share of Medicaid managed care beneficiaries based on a total of 66 million enrollees. These data should be viewed as a broader representation of enrollment trends rather than as a comprehensive comparison.

Key Insights from Q1 2025 Data

The 28 states included in our review have released monthly Medicaid managed care enrollment data via a public website or in response to a public records request from Health Management Associates (HMA). This report reflects the most recent data posted or obtained.  HMA has made the following observations related to the enrollment data:

  • Year-over-year growth. As of March 2025, across the 28 states reviewed, Medicaid managed care enrollment declined by 2.5 million members year-over-year, a 3.9 percent drop as of March 2025 (see Figure 1). This marks a continuation of the downward trend reported in late 2024, though with notable variation across states.

Figure 1. Year-over-Year Growth in Medicaid Managed Care States, 2020−24, March 2025

  • Localized growth amid broader declines. While most states experienced enrollment reductions, Indiana and North Carolina bucked the trend with measurable gains, suggesting the influence of state-specific policy shifts or demographic factors. Oregon and Texas also saw modest growth.
  • Sharpest contractions. Illinois, Maryland, and South Carolina, reported double-digit percentage drops, underscoring the uneven impact of redeterminations and eligibility changes.
  • Difference among expansion and non-expansion states. Among the 21 states included in our analysis that expanded Medicaid, enrollment fell by 1.8 million (-3.6%) to 48.6 million. In contrast, the seven non-expansion states saw a steeper proportional decline (-5.4%), to a total of 12.2 million enrollees.

Table 1. Monthly MCO Enrollment by State, January 2025 through March 2025

Note: In Table 1 above and the state tables that follow, “+/- m/m” refers to the enrollment change from the previous month, and “% y/y” refers to the percentage change in enrollment from the same month in the previous year.

It is important to note the limitations of the data presented. First, states report the data at the varying times during the month. Some of these figures reflect beginning of the month totals, whereas others reflect an end of the month snapshot. Second, in some instances, the data are comprehensive in that they cover all state-sponsored health programs that offer managed care options; in other cases, the data reflect only a subset of the broader managed Medicaid population. This limitation complicates comparison of the data described above with figures reported by publicly traded Medicaid MCOs. Hence, the data in Table 1 should be viewed as a sampling of enrollment trends across these states rather than a comprehensive comparison, which cannot be established solely based on publicly available monthly enrollment data.

Market Share and Plan Dynamics

Using our data repository from 300 health plans across 41 states, HMAIS’s report addresses corporate ownership, program participation, and tax status. As of March 2025, Centene continues to lead with 17.7 percent of the national Medicaid managed care market, followed by Elevance (10.8%), United (8.8%), and Molina (6.3%), as Table 2 shows.

Table 2. National Medicaid Managed Care Market Share by Number of Beneficiaries for a Sample of Publicly Traded Plans, March 2025

What to Watch

The policy backdrop remains fluid. The US House of Representatives’ passage of the One Big Beautiful Bill Act introduces sweeping changes to Medicaid financing, including proposed cuts of up to $715 billion. Additional federal proposals, such as mandatory work requirements, could further reshape enrollment patterns.

Stakeholders should prepare for:

  • Implementation of work/community engagement mandates for certain adult populations
  • Potential redesign of Affordable Care Act expansion programs
  • Retraction of federal regulations focused on streamlining of eligibility and redetermination processes to improve accuracy and efficiency

Connect with Us

HMA is home to experts who know the Medicaid managed care landscape at the federal and state levels. As the Medicaid landscape continues to evolve, HMAIS equips stakeholders with timely, actionable intelligence. Our subscription service includes enrollment data, financials, waiver tracking, and a robust library of public documents.

For more information about the HMAIS subscription, contact our experts below.

[1] Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin.

Medicaid Managed Care Enrollment Update: Q4 2024

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Our second In Focus section reviews the most recent Medicaid enrollment trends in capitated risk-based managed care programs in 29 states.[1] Health Management Associates Information Services (HMAIS) collected and analyzed monthly Medicaid enrollment data from the fourth quarter (Q4) of 2024.

The data offer a timely overview of trends in Medicaid managed care enrollment and valuable insights into state-level and managed care organization (MCO)-specific enrollment patterns. This information allows state governments, their partners, and other organizations interested in Medicaid to track enrollment shifts. Understanding the underlying drivers of enrollment shifts is critical for shaping future Medicaid policies and adjusting program strategies amid a dynamic healthcare landscape.

Overview of the Data

The 29 states included in our review have released monthly Medicaid managed care enrollment data via a public website or in response to a public records request from Health Management Associates (HMA). This report reflects the most recent data posted or obtained. HMA has made the following observations related to the enrollment data (see Table 1):

  • As of December 2024, across the 29 states tracked in this report, Medicaid managed care enrollment was 61.7 million, down by 3.6 million (-5.5%) year-over-year.
  • Though most states experienced declines in enrollment, six states saw enrollment increases as of December 2024—double the number of states from the previous year.

Figure 1. Year-Over-Year Medicaid Managed Care Enrollment Percent Change in Select States, 2020−24

  • Among the 22 expansion states included in this report, net Medicaid managed care enrollment has decreased by 2.1 million (-4%) to 49.5 million members at the end of Q4 2024, compared with the same period in 2023.[2]
  • Among the seven states included in this report that had not expanded Medicaid as of December 2024, net Medicaid managed care enrollment decreased by 1.5 million, or 1 percent, to 12.3 million members at the end of Q4 2024 compared with to the same period in 2023.

Table 1. Monthly MCO Enrollment by State—October through December 2024

Note: In Table 1 above, “+/- m/m” refers to the enrollment change from the previous month. “% y/y” refers to the percentage change in enrollment from the same month in the previous year.

It is important to note the limitations of the data presented. First, not all states report the data at the same time during the month. Some of these figures reflect beginning of the month totals, whereas others reflect an end of the month snapshot. Second, in some cases the data are comprehensive in that they cover all state-sponsored health programs that offer managed care options; in other cases, the data reflect only a subset of the broader managed Medicaid population. This limitation complicates comparison of the data described above with figures reported by publicly traded Medicaid MCOs. Hence, the data in Table 1 should be viewed as a sampling of enrollment trends across these states rather than as a comprehensive comparison, which cannot be established based solely on publicly available monthly enrollment data.

HMAIS also compiles a more detailed quarterly Medicaid managed care enrollment report representing nearly 300 health plans in 41 states. The report provides by plan enrollment plus corporate ownership, program inclusion, and for-profit vs. not-for-profit status, with breakout tabs for publicly traded plans. Table 2 shows a sampling of plans and their national market share of Medicaid managed care beneficiaries based on a total of 66.3 million enrollees. These data too should be viewed as a broader representation of enrollment trends rather than as a comprehensive comparison.

Table 2. National Medicaid Managed Care Market Share by Number of Beneficiaries for Sample of Publicly Traded Plans, 2024

What to Watch

Enrollment in Medicaid MCOs has experienced significant fluctuations recently, influenced both by policy changes and economic factors. Since April 2023, Medicaid enrollment has been on a downward trajectory as states complete eligibility redeterminations after the end of the COVID-19 public health emergency. This trend, coupled with financial and political challenges, necessitates strategic planning for stakeholders to navigate the evolving Medicaid landscape effectively.​

Potential changes that may affect enrollment and require scenario and readiness planning include:

  • Federal requirement, or a new state option, to implement Medicaid work requirements for at least some categories of enrollees
  • Changes to the federal financial match policy, which may cause some states to make different decisions about their Affordable Care Act expansion program for adults
  • Modifications in requirements and expectations for more efficient eligibility processes to improve the accuracy of determinations and assignment to eligibility categories

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HMA is home to experts who know the Medicaid managed care landscape at the federal and state levels. The HMAIS subscription provides point-in-time and longitudinal Medicaid enrollment data, health plan financials, and additional actionable information about eligibility expansions, demonstration and waiver initiatives, as well as population- and service-specific information. HMAIS also includes a comprehensive public documents library containing Medicaid requests for proposals and responses, model contracts, scoring sheets, and protests.

For detail about the HMAIS enrollment report and subscription service, contact our experts below.

[1] Arizona, California, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin.

[2] Health Management Associates, Inc. Medicaid Managed Care Enrollment Update—Q4 2023. HMA Weekly Roundup. April 17, 2024. Available at: https://www.healthmanagement.com/insights/weekly-roundup/april-17-2024/#in-focus2.

CMS Finalizes 2026 Payment and Policy Updates for Medicare Advantage and Part D

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CMS approves average increase of 5.06 percent for MA plans while deferring major policy changes in MA and Part D programs

The Centers for Medicare & Medicaid Services (CMS) released the 2026 Medicare Advantage (MA) and Part D Rate Announcement on April 7, 2025, finalizing payment updates for calendar year (CY) 2026. This announcement came shortly after the release of the Contract Year 2026 MA, Part D, and PACE Policy and Technical Changes Final Rule, on April 4, 2025. Together, these updates mark the conclusion of CMS’s annual rulemaking cycle for Medicare Advantage, ahead of the June 2, 2025, deadline for 2026 MA plan bids.

Notably, because of the timing of the draft notices and proposed rule, Trump Administration officials ultimately had more input into policies omitted from the rate notice and final policy rule than on policies that were finalized. For example, the final rule is exclusive of proposals to expand coverage for anti-obesity medications, guardrails for artificial intelligence (AI), and new requirements related to utilization management and prior authorization procedures.

In his confirmation hearing, CMS Administrator Mehmet Oz, MD, cited Medicare Advantage prior authorization practices and health risk assessments that lead to upcoding as areas that deserve further consideration and scrutiny, raising the potential for future regulatory shifts and even legislative reform. With the possibility of Medicare, including MA, facing cuts as part of broader budget negotiations in Congress, the rate notice and policy rule offer program stability counterbalancing the political and fiscal pressures that may emerge this year.

CMS has sought to stabilize MA and Part D programs into 2026, and stakeholders can benefit from understanding the impact in markets for 2026 and the signals of potential regulatory changes to come. For more in-depth analysis and insights on the rate notice, look for our policy and actuarial experts’ brief due out next week.

The remainder of this In Focus article reviews CMS’s decisions on major payment and policy proposals in the Rate Announcement and Final Rule and examines key considerations for healthcare stakeholders.

Payment Impact on Medicare Advantage Organizations

In the CY 2026 Rate Announcement, CMS projects that federal payments to MA plans will increase by 5.06 percent from 2025 to 2026, which represents a $25 billion increase in expected payments to MA plans next year. According to CMS, this represents an increase of 2.83 percentage points compared with the CY 2026 Advance Notice that is largely attributable to an increase in the effective growth rate. The increase in the effective growth rate—increasing to 9.04 percent in the Rate Announcement from 5.93 percent in the Advance Notice—is primarily the result of the inclusion of additional data on Medicare fee-for-service (FFS) expenditures, including payment data through the fourth quarter of 2024.

The Rate Announcement estimates represent the average increase in payments to MA plans and actual payments will vary from plan to plan. Below, Table 1 provides CMS estimates of the impact of finalized payment changes on net MA plan payments.

MA Risk Adjustment Changes

As expected, CMS finalized the last year of the three-year phase-in of the MA risk adjustment model, which requires calculating 100 percent of the risk scores using only the 2024 CMS-HCC (Hierarchical Condition Category) model in 2026. CMS also addressed stakeholder concerns with the planned transition toward a risk adjustment model based on MA encounter data, as previewed in the CMS CY 2026 Advance Notice. CMS pledged to engage stakeholders in this model development process while continuing to evaluate the feasibility, transparency, and timing of a future transition to an encounter-based risk adjustment model.

CMS also finalized the MA coding pattern adjustment factor of 5.9 percent for CY 2026, which is the statutory minimum adjustment factor to account for differences in coding patterns between MA plans and providers under Medicare FFS Parts A and B.

Part D Risk Adjustment

For CY 2026, CMS finalized the revised 2026 RxHCC model with adjustments for maximum fair price drugs. Importantly, CMS also finalized using separate FFS normalization factors for MA-Prescription Drug (MA-PD) plans and Prescription Drug Plans (PDPs), making 2026 the second year CMS will vary normalization for these two markets. The calculation of the factors for CY 2026 is different, however, and will have substantially greater impact than the method used previously. It also will reduce Part D risk scores significantly for MA-PD plans while increasing scores for PDPs.

MA Star Ratings

CMS continues to solicit feedback from stakeholders on ways to simplify and refocus MA Star Ratings measures to focus more on clinical care, outcomes, and patient experience of care measures. Also included in the CY 2026 Rate Announcement are non-substantive measure specification updates and a list of measures included in the Part C and Part D improvement measures and categorical adjustment index for the 2026 Star Ratings.

Separately, in the policy and technical changes rule, CMS finalized new regulatory requirements designed to enhance MA beneficiary protections in an inpatient setting, provisions related to allowable special supplemental benefits for the chronically ill (SSBCI), and the care experience for dually eligible beneficiaries enrolled in MA special needs plans.

Enhancing MA Beneficiary Appeal Rights and Notification Requirements

CMS is finalizing provisions that limit the ability of MA plans to reopen and modify a previously approved inpatient hospital decision on the basis of information gathered after the approval. Under the final rule, MA plans will be able to reopen an approved hospital admission only due to error or fraud. In addition, CMS finalized several provisions to enhance beneficiary appeal rights and new reporting and notice requirements, including:

  • Ensuring that MA appeals rules apply to adverse plan decisions, regardless of whether the decision was made before, during, or after the receipt of such services
  • Codifying existing guidance that requires plans to give a provider notice of a coverage decision
  • Ensuring enrollees have a right to appeal MA plan coverage denials that affect their ongoing source of treatment

Non-Allowable Special Supplemental Benefits for the Chronically Ill

The final rule establishes guardrails for SSBCI benefits by codifying a list of non-allowable examples (e.g., unhealthy food, alcohol, tobacco, life insurance). CMS did not finalize proposals that were designed to improve administration of supplemental benefits and enhance transparency of the availability of such benefits.

Improving Care Experience for Dual Eligibles

CMS finalized new requirements for dual eligible special needs plans (D-SNPS) that are applicable integrated plans (AIPs) as follows:

  • D-SNPs will be required to have integrated member ID cards for their Medicare and Medicaid plans
  • D-SNPs will be required to conduct an integrated health risk assessment for Medicare and Medicaid, rather than separate ones for each program.

These provisions affecting certain D-SNPS plans will be effective for the 2027 plan year.

Provisions Pertaining to the Medicare Part D Inflation Reduction Act

CMS is finalizing proposals to codify existing requirements related to key provisions of the Inflation Reduction Act, including no cost sharing for adult vaccines and capping monthly copayments for insulin at $35. In addition, CMS is codifying existing guidance related to the implementation of the Medicare Prescription Payment Plan, which is also part of the Inflation Reduction Act.

Key Proposals CMS Has Yet to Finalize

As noted earlier, CMS finalized a streamlined rule that excluded several regulatory changes identified in the November 2024 proposed rule. In addition to provisions related to coverage of anti-obesity medications, guardrails for AI, and mandatory analysis of the health equity impact of MA plans utilization management practices, the following proposals were not finalized. CMS notes that these proposals might be finalized in future rulemaking.

  • Expanding Medicare Part D Medication Therapy Management (MTM) eligibility criteria
  • Ensuring equitable access to behavioral health services by applying MA cost-sharing limits
  • Enhancing the Medicare Plan Finder to include information on plan provider directories
  • Promoting informed choice by enhancing CMS review of MA marketing and communication materials
  • Enhancing rules on MA plans’ use of internal coverage criteria

Key Considerations

The policies finalized in the CY 2026 Rate Announcement are projected to increase average Part C payments to MA plans by 5.06 percent in CY 2026—a significant uptick from the payment updates originally proposed in the CY 2026 Advance Notice. Nonetheless, the final rate increase will have varying effects across MA plans, with some experiencing larger or smaller impacts in CY 2026. MA plans should assess these outcomes as they prepare their bid submissions for 2026.

According to the CY 2026 Rate Announcement, CMS expects that the 5.06 percent increase will provide continued stability for the MA program and its beneficiaries while ensuring accurate and appropriate payments to Medicare Advantage organizations.

In the CY 2026 MA and Part D Final Rule, CMS adopted a significantly scaled-back final rule, which omitted some of the more far-reaching proposals for MA and Part D that were originally proposed in November 2024. CMS, however, could potentially revisit and finalize some of these proposals in future rulemaking. Moreover, new regulatory requirements that enhance enrollee protections in inpatient care settings and improving the care experience for dual eligibles signal CMS’s continued interest in improving program oversight and enhancing consumer protections for MA beneficiaries.

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MA stakeholders need to undertake scenario planning and be prepared to adapt to a rapidly evolving federal policy environment. From modeling and impact assessments of specific policy changes to strategy development and implementation, HMA is home to experts with diverse skill sets. Our team can help stakeholders assess and prepare for potential changes to prior authorization, looking holistically at their organization’s operations, patient care models, and reimbursement strategies. Our team also provides detailed modeling and assessments to ensure health plans are prepared for changes in risk adjustment and coding policies, supplemental benefits, and other key issues affecting capitation payment, bids, and care delivery models.

For details about the finalized payment and policy rules contact our featured experts below.

What to Watch: Medicare Payment Rules

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Medicare stakeholders are awaiting the imminent release of the Centers for Medicare & Medicaid Services (CMS) final Medicare Advantage and Part D rate notice and technical updates, as well as a final policy rule that establishes a significantly new direction for Medicare Advantage (MA) stakeholders. These final rules typically are released in April of each year.

In addition, the agency kicks off the annual cycle of payment rules for traditional fee-for-service Medicare, including the first wave of proposed rules that typically are released in April for the forthcoming payment year. These proposed rules for 2026 pertain to the following: Hospital Inpatient Prospective Payment System for Acute Care Hospitals, the Inpatient Rehabilitation Facility Payment System, the Home Health Payment System, and the Inpatient Psychiatric Facility Payment System. A second wave of 2026 proposed rules are typically released in July, including the Medicare Physician Fee Schedule and the Hospital Outpatient Prospective Payment System.

The MA rules and the first wave of Medicare Part A and Part B rules are highly anticipated regulations and now under review at the Office of Management and Budget. These rules are expected to be released in the coming days and weeks.

Why These Rules Matter

The rules set the rates for MA and reimbursement for a significant number of healthcare providers and facilities that serve Medicare beneficiaries. The rules also contain important information about CMS’s quality reporting programs and bonus payments and other changes required for Medicare stakeholders to ensure compliance.

What’s Different About 2025 Proposals

In the first year of a new presidential administration, CMS leaders have a limited window to include their policy priorities in the MA and Part D Final Rate Notice. CMS may, however, decline to finalize some or all of the prior administration’s proposals. Key issues that Health Management Associates (HMA), experts are watching for in the final rules include:

  • Whether CMS chooses to delay or not finalize significant policy changes proposed by the Biden Administration, including new requirements and guardrails around the use of prior authorization
  • Potential finalization of improvements to the Medicare plan finder
  • Direction on oversight of MA plan marketing activities
  • CMS decision and response to the proposal to expand coverage of anti-obesity medications under Medicare Part D and Medicaid

Stakeholders can access HMA’s review of the contract year (CY) 2026 MA and Part D proposed rule and key considerations and our review of the 2026 Advance Notice for the Medicare Advantage and Medicare Part D programs.

Similarly, in the first year of a presidential transition, CMS has a narrower opportunity to shape Medicare’s first set of proposed payment and policy rules. The agency may, however, begin to signal important policy direction on a global level and technical issues that can have an impact on Medicare stakeholders. HMA experts are watching in particular for requests for information and other signals of CMS’s Medicare priorities, including reforms in quality reporting, value-based contracting, pricing and contract transparency, among others.

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HMA’s expert consultants provide the advanced policy, tailored analysis, and operational skills you need to navigate today’s rapidly evolving regulatory landscape and to support implementation of final policies. Don’t let the uncertainty of future policies derail your strategic plans or burden your teams.

For details about the forthcoming Medicare Advantage and traditional Medicare regulations, contact one of our featured experts below.

New Insights on Medicaid Spending: HMA Analysis of Disaggregated Medicaid Managed Care Spending

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This week, our In Focus section highlights insights from a new Health Management Associates (HMA), issue brief, “New Insights on Medicaid Spending: An Analysis of Disaggregated Managed Care Spending.” Until now, most Medicaid cost data have focused on enrollees in fee-for-service (FFS) programs. HMA used the Centers for Medicare & Medicaid Services (CMS) Transformed Medicaid Statistical Information System (T-MSIS) database to analyze Medicaid managed care organization (MCO) spending in major categories of healthcare, including inpatient and outpatient hospital care, physician and other professional services, skilled nursing facilities (SNFs) and home and community-based services (HCBS), clinics, pharmaceuticals, and other services. HMA’s methodology can be applied to all 50 states and allows us to determine prices for these services, which, combined with data on the number of encounters, yields reliable cost figures.

Findings

Medicaid managed care accounted for $420 billion of the total $717 billion in Medicaid spending for federal fiscal year 2021. Professional claims accounted for the largest portion of Medicaid spending, totaling 25.1 percent, followed by SNFs at 19.7 percent, and inpatient claims at 15.4 percent.

Figure 1. T-MSIS Medicaid Spending by Service Category 2021 (MCO Disaggregated plus FFS)

What’s Next

This analysis can be replicated for subsequent years and will provide important information on Medicaid spending trends. This work also sets the stage for analyses and comparisons of cost categories by variables such as eligibility category (e.g., dual eligibles, children, parents, adults without children, the Medicaid expansion population, and designated as aged/frail/disabled); race and ethnicity; frequent users of hospital services; and people with multiple chronic illnesses. This type of analysis allows us to answer fundamental questions about the Medicaid program and can pinpoint areas of high need within the Medicaid population, such as:

  • How much do we spend on services for people with diabetes?
  • How much do we spend during childbirth/first year of life and in the last year of life?
  • How much do we spend for Medicare-Medicaid dual eligibles?

Data-informed discussions on these and other topics can help identify opportunities for efficiencies and timely care management to slow the growth in total healthcare spending. This information will provide important context for the policy debate, offering a full view of the relative magnitude of the major categories of Medicaid spending.

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Medicaid providers, MCOs, states, and policymakers all have an interest in identifying high-cost drivers of Medicaid managed care. The methodology applied in the analysis for the HMA issue brief can be applied and adapted for future analysis.

For details about this analysis, its implications for state and local policies, and additional research using T-MSIS, contact our experts below.

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