Does managed care under Medicaid save money and expand access?

There is a paucity of high quality research to demonstrate that managed care Medicaid saves money or improves the care of patients vs. the traditional fee for service Medicaid program. Despite this many states are turning to mandatory enrollment of all Medicaid patients in managed care including the aged poor and disabled. This paper will review the evidence to date on cost and quality and discuss the problems related to the evaluation of the effects of managed care on Medicaid. The Kaiser Family Foundation has assembled an extensive data base about costs and coverage at the state level. Statistical analysis of this data again reveals no clear and convincing evidence that managed care under Medicaid saves money or improves outcomes. The implications of these findings for cost control under the Affordable Care Act are also discussed.