The steadying state of Medicaid in the United States

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Despite the significance of the Medicaid market, detail on the market composition, growth drivers, and trends is often elusive relative to other health programs. This analysis, the fourth annual on the State of Medicaid, aims to fill that gap.

Our analysis

This analysis provides an in-depth view of the Medicaid market, the continuing impact of Medicaid expansion, and considerations for Medicaid health plans and organizations involved in Medicaid markets going forward. Highlights include:

  • Medicaid enrollment: While the year-over-year growth has moderated substantially, in 2016 Medicaid still posted overall growth of 2.3 million beneficiaries, or 3%. This translates to 75.2 million Americans being covered by a physical health Medicaid program, or 23.4% of the nation’s population.
  • Medicaid managed care: Private Medicaid health plans continue to increase in prominence
  • Private managed Medicaid health plans: For the first time in three years, the number of private Medicaid health plans declined in 2016, from 195 last year to 183. This net decline of twelve plans represents a mix of new plans entering the space; consolidation between existing plans; and plans ceasing operations, losing contracts, or exiting Medicaid
  • Medicaid: Expansion effects & forecasts: In 2016, Medicaid expansion took hold in three states, as citizens of the Bayou State, Big Sky Country, and the Last Frontier had eligibility limits raised, bringing the total number of Medicaid expansion states to 32
  • Future opportunities in a steadying Medicaid market: After the growth of recent years, it is clear Medicaid has now moved into more of a steady state. The steady state of Medicaid is significant – nearly one in four Americans covered, nearly three in four beneficiaries in a private health plan. The question many plans, vendors, and service providers are now asking is: how best to capitalize on this substantial market, even absent the easy growth of the past?
Our analysis


The steadying state of Medicaid

Undoubtedly, opportunities will remain for private managed care plans and service providers, but the steady state of Medicaid will likely make achieving the outsized gains of the past more difficult.

The extraordinary growth in Medicaid has focused the attention of the healthcare market. A more consequential, concentrated, coordinated, complex, and commingled future will supply the dynamism to ensure that attention will continue to be focused on the space.

Contact us

Ari Gottlieb

Director, Health practice, PwC US

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