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Newsletter Article


Medicaid Managed Care Plans Owned by For-Profits Have Higher Costs, Lower Quality

In many states, Medicaid programs have contracted out the delivery of health care services to publicly traded, for-profit health plans. A new Commonwealth Fund issue brief compares these plans with non-publicly traded plans owned by groups of health care providers, health systems, community health centers, or clinics. Researchers Michael J. McCue, D.B.A., and Michael H. Bailit, M.M., found that Medicaid managed care plans that are owned by publicly traded, for-profit companies spent an average of 14 percent of premiums on administrative costs, while the non-publicly traded plans spent about 10 percent. The publicly traded plans also received lower scores for quality-of-care measures related to preventive care, treatment of chronic conditions, members' access to care, and customer service.

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