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.

Milliman's quarterly financial analysis of Texas Medicaid managed care plans through Q4 SFY 2025 documents how the end of continuous coverage protections affected MCO enrollment, net income, and medical loss ratios across STAR, STAR Kids, STAR+PLUS, CHIP, and dual-eligible programs. The report examines financial metrics including directed payment pass-through expenses, administrative costs, and experience rebate impacts as plans navigated large-scale eligibility redeterminations. State Medicaid directors and MCO finance teams can use these program-specific benchmarks to assess operational performance during the unwinding period and inform rate-setting discussions.

This white paper argues that state child welfare agencies should strategically realign funding by expanding Medicaid coverage for behavioral health and clinical services while reserving Title IV-E federal funds for safety and permanency supports that Medicaid cannot cover. The authors contend that better coordination between Medicaid and child welfare financing can reduce fragmentation, decrease reliance on congregate care settings, and stabilize state budgets as federal Title IV-E reimbursement declines. For Medicaid managed care leaders, this presents both an opportunity and a challenge: MCOs may see expanded behavioral health service obligations for foster and at-risk children while state agencies seek stronger cross-system data sharing and care coordination.

Milliman's analysis of 2026 Medicare Advantage data reveals that D-SNP enrollment growth remains minimal outside of states transitioning Medicare-Medicaid Plans, while plans increasingly use C-SNPs to enroll dual eligibles and sidestep state Medicaid agency contracting requirements. The trend reflects MAO responses to tightening CMS integration requirements and state policies limiting D-SNP availability, with implications for how dual eligibles access coordinated Medicare-Medicaid benefits. The shift raises questions for state Medicaid agencies about care coordination oversight and whether dual eligibles in C-SNPs receive comparable integration as those in contracted D-SNPs.

Milliman examines how state Medicaid agencies and managed care plans can leverage HHS's newly released open-source dataset of provider-level Medicaid spending from 2018-2024, which includes service-level payments across both fee-for-service and managed care. The analysis identifies four strategic applications including contract negotiation support, fraud detection, network adequacy planning, and benchmarking—while noting data limitations and interpretation challenges MCOs should consider when using national aggregated claims data for operational decisions.

This piece outlines six implementation requirements for hospitals entering global budget arrangements, which shift traditional insurance risk from health plans to provider systems. While focused primarily on Medicare models like CMS's AHEAD program and state all-payer demonstrations, the shift affects how Medicaid managed care organizations structure provider contracts and share risk. MCO compliance and finance teams should understand these models as they increasingly appear in Medicaid alongside Medicare and commercial payers.

Milliman explains why state savings from Medicaid enrollment reductions are often overstated in managed care environments. When lower-cost members disenroll—such as through work requirements—average capitation rates rise because the remaining enrolled population becomes sicker and more expensive, meaning states don't save the full per-member capitation amount. The firm provides an interactive modeling tool to help states understand the complex fiscal dynamics of eligibility changes, including federal match implications, MCO tax structures, and administrative costs.

CMS's 10-year ACO LEAD demonstration will test Medicare-Medicaid integration in two states—one using managed care, one fee-for-service—with enhanced payment models designed to support complex, high-need dual-eligible populations. Milliman's analysis outlines participation scenarios and strategic considerations for state Medicaid agencies, managed care plans, ACOs, and providers as they evaluate partnership opportunities under the new model. The piece examines how different stakeholder approaches could shape member outcomes, financial performance, and care coordination for dually eligible beneficiaries.

This white paper examines how state Medicaid agencies can strengthen their oversight of MCOs through improved performance management systems, particularly in light of the 2024 CMS final rule requiring quality rating systems by 2028. The analysis outlines common challenges states face in monitoring managed care programs and proposes strategies for using data and performance measures more effectively to drive improvements in access, quality, and equity. The piece is directly aimed at helping state Medicaid directors and MCO oversight teams adapt to heightened federal accountability requirements while building stronger partnerships with health plans.

Life sciences companies seeking to understand Medicaid managed care purchasing behavior need to grasp how risk adjustment models translate member acuity into plan payments and profitability. The piece explains that Medicaid capitation rates are risk-adjusted based on enrollee health conditions and demographics, directly affecting plan revenue and financial performance. Because risk scores influence plan margins, they also shape formulary design and coverage decisions—meaning pharmaceutical manufacturers must account for how their products affect plan risk profiles and reimbursement.

Milliman's second installment in a risk adjustment series argues that effective risk adjustment depends on coordinated organizational infrastructure—not just coding accuracy—spanning governance, staffing, provider engagement, data systems, and compliance functions. The paper provides operational benchmarks and leading practices applicable across Medicare Advantage, Medicaid, and ACA plans, with direct implications for how Medicaid managed care organizations structure teams, oversee vendors, and integrate risk adjustment into care management and revenue integrity workflows.

Milliman's white paper provides guidance on optimizing risk adjustment operations across public programs including Medicaid managed care, focusing on how accurate documentation and coding ensure plans receive appropriate capitated payments that reflect member health status. The piece addresses how health plans can align risk adjustment processes with financial performance, emphasizing that risk scores directly influence revenue in capitated payment models. While it covers multiple programs, the operational and financial implications are directly relevant to Medicaid MCO compliance and finance teams managing risk-based payments.

This white paper examines how state Medicaid agencies can strengthen enforcement of mental health parity requirements for managed care entities, even as federal priorities shift following the 2025 suspension of certain commercial market rules. The analysis walks through the three types of treatment limitations under MHPAEA—financial requirements, quantitative limits, and nonquantitative treatment limitations—and emphasizes that existing Medicaid parity obligations remain in effect regardless of federal enforcement changes. For MCO compliance teams and state Medicaid directors, this offers a roadmap for improving oversight of behavioral health access in managed care programs, which collectively represent the largest payer for mental health and substance use disorder services.

HRSA is launching a pilot program in January 2026 that fundamentally changes how the 340B drug pricing program works—moving from upfront discounts to a rebate model for 10 high-cost drugs subject to Medicare price negotiation. This shift has direct implications for state Medicaid programs and their managed care plans, particularly around duplicate discount prevention, claims processing, pharmacy reimbursement, and financial reconciliation processes that have been built around the traditional 340B discount structure for over 30 years. States need to assess operational readiness now to handle the accounting and reporting changes this model introduces.

This benchmarking report examines enrollment dynamics in Medicaid and individual marketplace insurance since 2020, finding that subsidized marketplace growth was concentrated among near-poverty populations while Medicaid changes varied significantly by state. With enhanced premium subsidies set to expire and new federal rules on income verification, premium subsidy repayment, and potential Medicaid work requirements taking effect, the analysis projects substantial enrollment volatility in 2026—including an estimated 3.5 million losing individual market coverage. For Medicaid MCOs and state programs, this signals potential membership shifts, redeterminations challenges, and the need to prepare operational systems for new eligibility verification and work requirement administration.

Milliman analyzes the limitations of long-term care supplemental benefits now permitted in Medicare Advantage plans since 2019, finding they cover only a fraction of typical LTC costs that run $70,000-$130,000 annually. The piece examines what MA plans can offer for home health, adult day care, and caregiver support versus the comprehensive custodial care needs of aging beneficiaries. This matters for Medicaid managed care because when MA benefits are exhausted, beneficiaries often spend down to Medicaid eligibility, shifting LTC costs to state programs and dual-eligible plans.

Milliman's annual benchmarking report analyzes key financial performance metrics for Medicaid managed care organizations using standardized NAIC reporting data from 2024. The report provides comparative financial benchmarks that MCO finance teams, state Medicaid agencies, and consultants use to assess plan performance, evaluate rate adequacy, and identify industry trends. This type of standardized financial analysis is a core reference tool for compliance officers reviewing financial solvency and state officials conducting rate-setting and contract oversight.

Milliman research finds that incorporating social determinants of health into Medicaid managed care risk adjustment models produces modestly better payment accuracy and reduces financial volatility for MCOs and ACOs. The improvement is most pronounced for beneficiaries with lower medical complexity but higher social risk, where morbidity-only models systematically underpay plans—suggesting SDOH factors help correct revenue distortions when members face barriers to care that suppress diagnosis coding. The findings offer technical guidance for state Medicaid agencies considering updates to capitation rate-setting methodologies.

Milliman analyzed non-emergency medical transportation programs across seven state Medicaid clients, comparing delivery models and per-member-per-month costs as the NEMT market grows toward a projected $15.58 billion by 2028. The analysis examines how states exercise discretion in administering this federally required benefit, which serves 4-5% of Medicaid enrollees annually, and develops hypotheses for improving oversight and cost management. The findings are directly relevant to MCO finance teams and state Medicaid directors responsible for NEMT benefit design and vendor management.

Milliman actuaries examine the structure of federal matching rates (FMAP) across traditional Medicaid, ACA expansion populations, CHIP, and administrative costs, analyzing how potential shifts in federal matching formulas could impact state Medicaid budgets. The white paper models three alternative scenarios for matching rate changes and their financial implications for state Medicaid programs. This analysis is directly relevant to state Medicaid directors and MCO finance teams navigating budget uncertainty and potential federal policy changes that affect managed care capitation funding.