Medicaid MCO Underwriting Margins Nearly Break Even in 2025 After Two Years of Decline

Milliman's 18th annual benchmarking report analyzes financial performance for 186 Medicaid MCOs representing $305 billion in revenue, finding composite underwriting margins improved slightly to -0.1% in 2025 from -0.6% in 2024, though still well below the 2.5-3.5% gains seen during 2021-2023. The report shows medical loss ratios at 94.3%, declining risk-based capital ratios, and administrative costs rising on a per-member basis as enrollment fell post-PHE unwinding, providing state directors and MCO executives critical benchmarks for assessing rate adequacy and financial health heading into 2026.

Managed Care · Finance

This is outside commentary from Milliman, not part of Medicaid Monitor's independently scored news coverage.

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