Medicaid is a government program that provides healthcare along with expanded benefits and services to millions of Americans.
The majority of states contract with managed care organizations (MCOs) to deliver Medicaid benefits. This approach, known as the managed care model, is a public-private partnership that aligns with federal and state requirements to deliver a higher standard of care.
Who Medicaid covers
70M
Medicaid provides coverage for over 70 million people, including 30 million children and 5 million people with disabilities.1, 2
Medicaid serves certain people experiencing low incomes, including pregnant women, children (including those in foster care), and seniors. Medicaid also serves people with disabilities.
States may choose to expand eligibility to additional groups. Individuals eligible for Medicaid must meet certain Federal Poverty Level (FPL) eligibility thresholds.
How Medicaid works
A federal and state partnership
States create and run a Medicaid program based on federal requirements to serve people in their state. States may also choose to provide more services or cover more of the population than is required.
The federal government has requirements that all states must follow when running Medicaid programs and provides at least 50% of the funding for these programs.
States may contract with MCOs to deliver coverage.
75%
Most states that contract with MCOs enroll 75% or more of all Medicaid beneficiaries in MCOs.1
The managed care difference
Why managed care
The managed care model is the only model with the structure and resources needed to address today’s complex healthcare needs, enabling states to deliver higher quality care and improve health outcomes.
With the cost of healthcare rising, managed care also allows states to better control cost trends and budget with predictability.
21%
Studies show that MCOs can reduce prescription drug spending in Medicaid, with one study estimating that MCOs reduced drug spending by 21% without sacrificing quality.2
35
MCOs report 35 federally-required quality measures to states, in addition to state-specific performance measures, as part of plan oversight and performance-based incentives tied to quality outcomes 3
91%
91% of parents/guardians and 86% of adults give a positive rating of their Medicaid health plan when surveyed, demonstrating Medicaid’s ability to deliver high-quality, member-centered coverage 4
Resources
The managed care difference goes beyond the basic check-up. To learn more about how managed care has gone above and beyond to address all aspects of health, click below.
Sources
- MACPC, MACStats: Medicaid and CHIP Data Book, Exhibits 14 and 30, February 2026. NOTE: Totals exclude M-CHIP enrollment.
- Dranove, A Dose of Managed Care: Controlling Drug Spending in Medicaid, 2021.
- CMS, Child and Adult Health Care Quality Measures: 2026 Child and Adult Core Sets.
- ARHQ, December 2025. NOTE: Parents or caretakers respond on behalf of children in CAHPS.