Financial performance indicators for health plans in Medicaid managed care.

Abstract

This study is a descriptive analysis of the financial performance of licensed managed care plans that participate in Medicaid by ownership, provider-sponsorship, and the level of Medicaid focus and Medicaid enrollment. Using 2001 Interstudy data, health plan financial data for the Medicaid product line are analyzed on a national level for individual plans. Using SEC 10-K financial filings, company level analysis of two publicly traded, Medicaid-focused, managed care plans are analyzed as well. The analysis found that for-profit and non-profit plans had similar profit margins; however, for-profit plans incurred higher administrative costs ratios and lower medical benefits ratio. Plans with higher Medicaid enrollment had higher medical benefits ratios, while both provider-sponsored and non-provider sponsored plans had similar profit margins. Finally, publicly traded Medicaid focused plans achieved profit margins considerably higher than other Medicaid-focused plans.