Commercial health plan participation in medicaid managed care: An examination of six markets

This study examines six local health care markets to gain a better understa nding of the factors associated with the decision by commercial plaits to p articipate in Medicaid managed care (MMC). Findings suggest that no single factor explained why plans plans chose to participate in MMC in a particula r market. Instead, a combination of factors-generally economic but not alwa ys-determined whether a plan participated. While rate adequacy was central, it was not the nly factor. Results indicate that it is capitation rates re lative to other factors (such as provider costs, administrative costs, enro llment volume, growth opportunities in other markets) that matter rather th an simply the level of rates.