research

The dramatic disruptions to the workforce caused by the pandemic and the Medicaid maintenance of effort requirement attached to the Medicaid funding increase in the Families First Coronavirus Relief Act have added millions of individuals to the Medicaid rolls. Over 80 percent of people in Medicaid receive coverage through MCOs. Accordingly, maintaining an actuarially sound rate-setting process is essential to a stable Medicaid managed care program. Ensuring that Medicaid managed care plans receive actuarially sound capitation rates will ensure that plans can viably cover the needs of Medicaid enrollees and appropriately reimburse providers for their services. Without such assurances, providers’ willingness and ability to participate in Medicaid may be jeopardized, threatening access to care for people on Medicaid. Ensuring that Medicaid managed care plan rates are actuarially sound is, therefore, an essential component of a strong, efficient, and effective Medicaid program.

Waiving actuarially sound rates will only place an onerous burden on our nation’s safety net at a time when states should fairly compensate their Medicaid health plans. During this epochal pandemic, it is more important than ever to protect health plans and providers’ financial livelihoods through actuarially sound capitation rates.

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