Medicaid Capitation Expansion's Potential Cost Savings
April 2006
The Medicaid Health Plans of America and the Association of Community Affiliated Plans
National Medicaid expenditures have risen at an average of 8.2 percent annually since 1995, outpacing states' revenue growth and placing enormous pressure on states to implement effective cost containment programs. The Medicaid Health Plans of America and the Association of Community Affiliated Plans jointly engaged The Lewin Group to quantify the savings that can be realized through state Medicaid agencies entering into capitation contracting with Medicaid managed care organizations. The report found, among other key points, that up to $83 billion can be saved over ten years if the capitation model were immediately applied to all appropriately suited Medicaid funds.